I recently attended an entrepreneurial roundtable where aspiring entrepreneurs meet and discuss new business ideas with experienced business founders. It is a great example of how collaboration can spur the development and execution of a new business.
When one entrepreneur was asked how he differentiated from his competitors, of which there were only a few but strong examples, he mentioned price — because they were new and had little overhead, they could offer services at a better price.
The problem with this strategy is that as soon as your competition sees you as a threat, all they have to do is lower their cost long enough to take away this differentiation.