> Another way to put it: If the market is really that small that one small startup can take away business from another small startup, then you don't have much o

> Another way to put it: If the market is really that small that one small startup can take away business from another small startup, then you don't have much of a market at all, and you should find a larger market. This is true but not the entire picture. It is extremely common for the VC community to de facto agree on a leader of a space. Markets are frequently interpreted as winner takes all, despite the reality that almost none are. Once a winner has been agreed to it can be extremely difficult to raise funding in the same space.