“Who are your competitors?” is the wrong question, says Brian Balfour, ex VP Growth at HubSpot in his recent essay:
You should rarely think about competitors, because competitors (by your definition) are rarely who you are truly competing with. Most products are competing with alternatives. Alternatives are the other ways your target audience are solving the problem today.
Examples of Alternatives:
- Slack was not competing against Hipchat or any other chat platform, but were trying to become the primary alternative to email. Their current slogan: "Break out of the inbox"
- Pinterest was not competing against Svpply, iHeartThis, Fancy or any of the other pinning services, but were trying to become the primary alternative to cutting out pics from magazines or copy/pasting image files into documents.
- DocuSign was not competing against HelloSign or other e-signature companies, but were trying to become the primary alternative to signing documents with ink and paper.
Brian goes on and mentions three cardinal mistakes you are likely to make if you focus on competitors:
- If you compare yourself to your competitor, you are likely to look, feel and sound very similar to them (and vice-versa).
- You Will Play Too Small of a Game - Alternatives typically have 10X to 1000X the usage of competitors. It is a much bigger ocean to fish in.
- You Won't Understand Real Psychology Of Your Users - Most of your audience has a habit built around the alternative with very specific actions, workflows, and motivations. You need to build against those things to break the habit with the alternative and establish it with your product.
Three Steps to Define your Alternatives
- Interview existing customers and find out what problems your product solves for them.
- Interview non-customers from your target group and Brian suggests to ask them: "When was the last time you had this problem? Walk me through step by step how you solved the problem."
- Thirdly go back to the drawing board and ask yourself how you can build and provide a 10x experience to the alternative way your users solve their problems today.
I did this process myself in the past and even at TestingTime (a test user recruiting company), one popular answer in step 2 was: "I am using an excel sheet, then I post Facebook, then I call them up...etc., etc.". And that's where you know you can provide a 10x experience. Of course some will also mention competitors in step 2, but if that's the majority of non-customers you interview you might be in a too competitive of a market (aka red ocean market).
Take the time and go through this exercise yourself. Its really worth it.