We live in a world of competition; almost every major sector out there has a few key players that make market entrance difficult, and startups are highly vulnerable to high competition.
The number of startups is ever-expanding: the U.S. alone has over 83,000, with India (more than 17,000) and the UK (over 7,000) following suit. Unfortunately, 90% of them fail, with only the top 10% remaining afloat. It’s tough out there, and figuring out one’s place where so many bigger companies put pressure on newbies can be immense.
That doesn’t mean ambitious companies shouldn’t try, though. It just means they have to be smarter than their competitors. Take DeepSeek AI, for instance. This startup managed to succeed against some of the most formidable rivals out there, challenging such giants as Google and Bing. And it’s not just jaw-dropping—it’s inspiring, too. What has caused DeepSeek’s success, and what can it teach the other startups?
This article will answer the questions, “What is DeepSeek AI?” and “How did DeepSeek do it?” It will then explain how to succeed in a startup business and create unique value.
Understanding the challenges faced by startups
Carving out some space for oneself in the dynamic and often merciless business is particularly troubling for startups. To fit in and earn the opportunity to pitch themselves, they must overcome these challenges:
- Limited financial resources. Money is probably the Achilles’ heel of most startups, as they operate with tight budgets. They figure out how to develop a product that makes the most sense quality-wise and not lose all the resources in the process. Research supports this claim: in 2022, almost 50% of startups named lack of financing as the main reason for their failure. This is especially problematic because these companies must expand and improve rapidly to reserve a spot in the industry. They have to allocate resources with product development, marketing, and operational costs in mind.
- Market penetration. Gaining traction in a competitive market is burdensome, especially when established players already have strong brand recognition and customer loyalty. Today’s business opposition is often about finding a niche where others won’t quickly stifle the promising business.
- Competing against bigger companies. Larger businesses don’t want trespassers, so they often stifle the emerging startup competition before it has time to grow more popular. And even if the rivalry isn’t aggressive, larger enterprises benefit from economies of scale, extensive networks, and years of accumulated reputation. Startups have to acquire all of these with time, and they’re lacking it, too.
The story behind DeepSeek’s success
So, the DeepSeek AI app is the newest tech miracle by many standards, but why? Let’s dive in slowly.
Company overview and impact
What is DeepSeek? DeepSeek is a new player in the AI market; founded in 2023 in China by Liang Wenfeng, it has quickly gained attention for its unconventional approach to AI and technology in general. The company intended to transform the existing industry and perform in the highly active but demanding niche.
According to Forbes, the Chinese AI startup DeepSeek is worth at least $1 billion despite having yet to monetize much. During the first two weeks since the DeepSeek app was launched, it was downloaded by more than 3.6 million people.
Large news resources and social media have been fascinated by how the small Chinese AI startup DeepSeek shocked Silicon Valley. What does it mean for big business?
The phenomenon of DeepSeek lies in its emphasis on the practical and cost-efficient use of AI to make it more comfortable for the end user. It has already provided highly effective AI models, showing that AI isn’t just about offering expensive and sophisticated technologies but also about how they are used.
It has demonstrated the ability of smaller companies with ambition and a creative view of their product to challenge larger rivals and deliver value to a responsive and eager target audience.
How DeepSeek outshined bigger players
How did DeepSeek crash the market, though? Here’s what has made its impact so noticeable.
Perfect timing
DeepSeek launched its models right when many businesses worldwide were already aware of the immense potential of AI. But it started to search for affordable and resource-conscious solutions. While the AI market was in full swing, most dominant players were expensive and powerful enough to dictate prices on their terms.
Here comes DeepSeek—new, cheaper, and more effective. And it came right when the first crucial regulatory standards were already set, and its performance started on the ethical foot without the risks the older companies faced.
Agility and innovation
The company fosters a culture of continuous innovation and the ability to change its pace and approach as the industry changes. It’s not a secret that DeepSeek developed its models in the face of the trade war between the U.S. and China, making the firm’s access to Nvidia chips and other Western tech either limited or impossible.
This pushed the business to adapt and seek other opportunities. Also, unlike many Chinese giants with rigid and strict workplace culture, DeepSeek knew how to succeed with a startup—it went for experimentation.
Customer-centric approach
Many larger companies started by providing solutions that worked but weren’t suited for the user. Instead, they were focused on delivering high-tech and new products that were considered valuable just because they were developed—undeniably, a result of the first wave of AI solutions of such a high level.
Nevertheless, DeepSeek took a different turn: it started learning what users wanted and how to ensure their collaboration with its models adapted to user behavior. It is intuitive, simple to use, and responsive to behavior and input.
Using state-of-the-art technology
It has become known for its impressive AI products, particularly DeepSeek-V3 and DeepSeek-R1, which perform at the same or even higher levels than OpenAI’s and Anthropic’s models. These can complete a variety of tasks, from creative writing to coding.
Its search option has particularly affected the public due to its reliance on user intent and natural language processing (NLP) to provide more relevant results than Google or Bing with their keyword-based search procedures.
Cost efficiency
The company claims that it spent $5.58 million on R1, which is a considerably lower cost compared to much higher development prices in OpenAI or LLaMA. How did DeepSeek manage to develop its AI at such a low cost? Unlike large corporations with extensive overhead expenditures, AI startup DeepSeek optimized its operations to remain lean and efficient and used open-source models to learn from.
The company also went for cloud-based solutions instead of investing in expensive on-premise GPUs. On top of that, its AI model architecture is optimized for fewer computational resources. These and more cost-effective strategies have challenged other companies to face their own potentially redundant and ineffective practices.
Key strategies for startups to compete with bigger companies
How can a new business compete against similar, well-established businesses in a community?
Startups need to learn strategies that can give them leverage when they start entering the market. How can they face competition from large businesses and persevere? Below are the main startup success factors to rely on.
Target niche markets
No matter how great their product is, startups mustn’t penetrate the broad markets with large dominant enterprises. There’s no need to go head-to-head with them; instead, finding niche markets where competition is diverse or minimal is best.
Newbies should evaluate what segments are safest and where they can meet the audience’s needs, which the giants didn’t fulfill. It allows much smaller competition and easier brand positioning—previously ignored customers will demonstrate greater loyalty to the business and finally find a solution.
Focus on practical applications
Many want to know how the Chinese AI startup DeepSeek made a model that rivals OpenAI, but the answer lies in a practical standpoint. Even though innovation should be one of the key priorities for a business, some companies forget that, and it is the main value they should focus on.
Your technology should have a clear goal that targets a problem or barrier and suggests opportunities to overcome it. Business owners should begin by conducting market research and consider what practical proposition they can create.
Understanding users’ pain points will allow you to narrow your instruments, saving you resources and money. A startup should be especially careful when determining how it spends its resources because of its limitations. However, such circumstances can motivate it to simplify its product implementation with easy integration.
Build a strong team
Human resources are probably one of the aces you should cherish when it comes to things that cannot be imitated. Once the great team is assembled, it doesn’t matter how big the competitors are—they cannot take away professionals with exemplary dedication and culture.
Companies that want to know how to succeed as a startup should try to hire strategically and focus on multi-skilled employees who are adaptable enough to expand beyond their narrow set of tasks. It doesn’t mean being a jack of all trades, but the product requires out-of-the-box thinking and working. Promote a top performance and experimentation culture to encourage your team’s creativity and decision-making.
Innovate and adapt quickly
Startups cannot afford slow choices and delays—the wave of change can easily send those business fledglings to the bottom. But speed can also be an ally for new businesses considering how startups can compete with larger companies. The latter cannot implement immediate changes due to the size and complexity of their operations.
Startups can innovate and launch new products fast without going through the same hoops as their rivals. Promote a culture of innovation and experimentation in your company, listen to market signals, and track recent trends.
Build a loyal user community
Users who haven’t experienced your solutions are highly loyal to brands that they already use. Figuring out how to beat the competition in business can be challenging.
First and foremost, build personal connections with your customer base; you are closer to them than bigger businesses. A smart customer relationship strategy relies on authenticity and direct engagement to create strong and active communities.
Creating a loyal audience takes exploring social media and traditional communication channels, as it’ll serve you well and foster word-of-mouth advertising. During the launch period, early access programs and special offers will be offered to new users.
Then, the initial contact with the audience can be strengthened by studying the feedback and reacting to positive and negative reviews.
Offer better value
What does a startup need to succeed? Unique and better value. One of the easiest and most attractive ways to do so is by offering lower prices than rivals. Top-level customer service comes next—personalization, more discounts and loyalty programs, and more empathetic and responsive customer service agents.
Since we encourage going for a specific niche, this also means developing unique features, customization, or design that cannot be replicated.
Getting ready to challenge the big market
Newbies are, of course, eager to understand how to overcome competition in business. This article offered a glimpse into some of the answers. Getting into the larger markets is possible—startups only need to know what to do to surpass the sharks.
Effective businesses like DeepSeek don’t follow the agreed-upon paths and seek their own. In many cases, limitations aren’t just barriers—they are your opportunities for improvement and growth. Don’t be ideal; startup success is about being smart. With your dedicated team, you can carve out a place for yourself and find the right audience.
Need help figuring out the lush market segment and developing the right app? Reach out to us: our team is always ready to go full-on creative and knows how to make a startup succeed with unique strategy and development.
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About the author:
Alexey Shalimov, CEO at Eastern Peak
As CEO at Eastern Peak, a professional software consulting and development company, Alexey ensures top quality and cost-effective services to clients from all over the world. Alexey is also a founder and technology evangelist at several technology companies. Previously, as a CEO of the Gett (GetTaxi) technology company, Alexey was in charge of developing the revolutionary Gett service from ground up and deploying the operation across the globe from New York to London and Tel Aviv.
