Who REALLY is your competition?
The first step in working with our clients is the discovery session, where we learn all about them – their value proposition, their customer archetypes, the benefits they provide to customers, etc. – so that we can create the most relevant and effective messaging when putting together their video. One of the questions we ask is simply “Who/what is your competition?” and we consistently get a list of other companies that provide a similar service; for example, a project management platform will list Basecamp and other project management platforms as their competition.
But who/what REALLY is your competition?
Startups need to think about what their target customers do to solve the problem that the startup aims to solve, not just other companies who provide a similar platform. Going back to the project management example, Basecamp is definitely a competitor, but there is a whole other subset of the target market that simply uses email to manage their projects. They create an email to layout the specifics of the project and send it to all those involved in it. The recipients ‘reply all’ to the email to communicate comments, and attach files to share. It’s easy and obvious for anyone starting a project.
Another product set that competes with almost every company is the Microsoft Office suite (at a minimum, Word, Excel and PowerPoint). Anyone that’s used a computer at any point in time owns these products and knows how to use them. One of the office products (or a combination of them) can work as a simple solution for so many problems, and the almost 100% awareness level of these products combined with the easy accessibility (they’re already on your computer) makes them a great solution. Going back to the project management example, I recently worked on a project where we created the project’s timeline in Excel using horizontal cells as the timeline and the vertical cells as the task. It was easy to setup, share and access. No signups, no free trial, no credit cards, no onboarding, no troubleshooting.
I mention email and MS Office particularly because these work for so many situations, but there is probably a whole other list of solutions that people use to solve the problem you aim to solve for them that go beyond other companies that provide a similar service.
Another competitor that seems to be rarely considered for non-mission critical solutions is time – or more accurately, all the other things a person does with their time. If you provide a book / movie recommendation engine, and I’m your target customer, you’re not competing with other book / movie recommenders, you’re competing with the fact that my day is already full and I’d have to take something else out of my day to even try your service. Now if your target customer includes that they are actively seeking your solution, that’s fine… even preferable – just ensure your market size incorporates this (the size of the market actively searching for your solution is a very small fraction of the number of people of a certain age / sex / etc. that you target).
The implications of this type of thinking obviously goes well beyond what you list to your explainer video agency during a discovery session. Understanding your true competition gets you thinking about how you acquire your customers, which is likely what stands between you and an IPO; it’s not your software’s features or whether or not you listed your team on your ‘About Us’ page. If you’ve truly done your job at customer discovery and customer validation, you’ll understand how these customers use their time and what they do instead of using your product, which is your real competition. Acquiring a user who patches together Word, Excel and email capabilities requires a totally different set of actions than bidding on keywords for someone who actively searches for other providers who have a very similar platform.
And customer acquisition is always the name of the game.