Here at Healthy Competition, we love startups.

Especially the ones that aren’t afraid to punch up against legacy competitors.

Why? Because they’re working with limited resources and lean on creativity and speed to win.

But sometimes, they poke the bear too early. Or in the wrong way.

And then the bear sues the snot out of them.

Hey, we can’t win ‘em all. Here’s a list of startups that were sued so badly by their competitors that they never recovered.

1. Bang Energy vs. Monster Energy 🥤

In 2020, Bang Energy was the fastest-growing energy drink brand in the U.S.

It seemed everything was going well. But under the surface, they were desperately fending off a lawsuit against Monster Energy.

The lawsuit began in 2018 after Bang released an ad featuring a monster being defeated by a group of Bang-drinkers. (I laughed writing “Bang-drinkers”)

Naturally, this caught Monster’s attention and they sued Bang for false advertising.

Here’s what else Monster accused Bang of:

• falsely claiming that their "Super Creatine" ingredient was "20x more effective at reaching the brain than other forms of creatine."

• falsely claiming that their drinks could "reverse mental retardation" and cure disorders such as Alzheimer's and Parkinson's disease.

• stealing trade secrets from former Monster employees.

• offering Monster’s retailer contacts higher commissions if they stocked Bang products instead of Monster products.

The jury found Bang liable on all claims. So they had to pay $293M in damages. Ouch.

Bang filed for bankruptcy in October 2022.

2. Psystar vs. Apple 💻

Back in the late 2000s, Psystar produced non-Apple computers running Mac software.

They operated as a niche player in the computer market, targeting customers seeking cheaper alternatives to Apple’s hardware.

Apple didn’t like this. So they sued Psystar in 2008 for copyright infringement, and won in 2011.

That same year, Psystar filed for bankruptcy citing inability to pay its debts due to the lawsuit.

3. Blackberry vs. NTP Inc. 📱

When it comes to Blackberry’s downfall, most think the iPhone was responsible.

But it was actually a little-known company called NTP that kicked things off.

NTP was a holding company whose primary business was licensing and enforcing patents related to wireless email technology.

In 2001, they claimed that Blackberry had infringed upon several of their patents. This led to a years-long legal battle between the two.

By 2006, these issues boiled into concerns of a potential service shutdown for Blackberry. Many of their customers, including major corporations and government organizations, began seeking alternatives.

It didn’t help that competitors like Apple’s iPhone and Android-based smartphones were starting to gain traction in the market.

Blackberry eventually settled with NTP and paid $612.5M. But the damage was done. The long-drawn legal battle took a toll on Blackberry’s brand perception, market share, and overall competitiveness.

Snippets

• 🆓 | Here’s a guide to help you build a Competitive Intel program in 30 days. It used to cost a few hundred bucks. Now it costs $0.

• 🗣️ | Reviews.io published a landing page in response to inaccurate claims made by competitor, Yotpo. Thanks, Mindy, for sharing this one!

• 😓 | Zapier reduced their headcount by ~10%. The first reason they cited? Competitive challenges unique to anything they’ve seen before.

• 🥊 | Freshworks & Zendesk got into a tussle on LinkedIn. Check out the comments in these two posts (Zendesk has since removed all comments on their post).

Quick Tips

New Podcast: Pivoting from Government to Corporate Competitive Intel

This episode was recorded live in the Healthy Competition community with Sam Rinaldo, CI at Lucid, and Tracy Berry, CI at Freshworks.

Both Sam and Tracy spent a portion of their careers in the government intel space before pivoting to the corporate side. After listening through, you'll learn:

• how their backgrounds gave them a leg up when they transitioned to tech

• what they learned in government intel that they were able to apply to their roles in tech

• common misconceptions that the tech industry has when it thinks about government intel

From the Community

1,000+ messages are shared every month by Product Marketers and Competitive Intel practitioners in the Healthy Competition community. Here are some recent threads that got the folks talking.

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💚Andy