In the not too distant past, I read this on Popey's blog:

Friends wife: "Is that Firefox? Where have I heard of that?"
Me: (not wanting a conversation about geek stuff in the pub) "It's a product which competes with one of Microsofts products."
Friends wife: "Nah, we don't have any competitors."
Me: "..."
Friends wife: "Except maybe Google.

I thought it was quite amusing, and it's one of those things that really gets people's backs up in the Community.  However, less than a week later, I came across the same thing myself.  In my parent's Kitchen of all places.  One of my Mum's friends was round, and I was working in Birmingham for the day, so popped home to say hi.  I new her son worked 'In computers', and she's been quite knowledgeable in the past.

Mum's Friend: "So you work up in Manchester then Andy?"
Me: "Yeah, for a technology company"
Mum's Friend: "So what do you actually do?"
Me: "I develop Open Source Office Servers & Solutions for SMEs - creating a more affordable system than Microsoft Exchange."
Mum's Friend: "Ooh, so is it a big company you work for?"
Me: "No, we have about 20 employees"
Mum's Friend: "So you're not really a competitor to Microsoft then... My Son works for Microsoft."

What defines competitor.. someone who competes in the same market.  I've replaced MS Exchange Servers with Open Source Solutions.  If that's not competing, I don't know what is!