The Importance of Understanding Your Competitors

In this episode Jon and Justin discuss talk about how you should think about your software product's competition.

Why you shouldn’t focus on the competition

• It’s a distraction. The main point by many folks is: “when you focus too much on the competition, it means you’re not focusing enough on your customers.”
• It causes anxiety.“Last summer, I stopped[reading industry news]. I had just reached the point at which I could feel an unhealthy level of toxicity piling up inside of me. I felt myself getting too involved, too absorbed, and a bit too anxious about what I was missing, and about what I knew or didn't know, but thought I should know. I was checking Twitter too often and reloading sites too often. If someone told me about something I hadn't heard of, I felt like I should have already known about it. Industry news was becoming an addiction.” - Jason Fried
• It’s too tempting to copy features. “Copying skips understanding. Understanding is how you grow. You have to understand why something works or why something is how it is. When you copy it, you miss that. You just repurpose the last layer instead of understanding all the layers underneath.” – Jason Fried
• It can lead to feature creep. company A is doing this, company B is doing that, so let’s do them all. also, paralyzing indecision and no real thought about why you’d be building a feature.

“I wouldn’t advocate spending much time worrying about the competition — you really shouldn’t waste attention worrying about things you can’t control — but if it helps make the point relatable, the best way to beat the competition is to last longer than they do.” – Jason Fried

Why you should focus on the competition

• It’s a way of understanding your customers. You should be aware of why customers are choosing (or not choosing) the competition. 
• It’s more competitive now. I wrote a post about this.  “It's getting more expensive to build SaaS companies and exits are weak.” Mattermark, 2016. “We're not building these basic CRUD apps like we used to be able to. The stuff's too competitive now.” – Rob Walling. "No one wants to admit it, but the old ‘your product must be 10x better than existing solutions’ trope is dead. I think this is one of the most hostile times for startups that we’ve had, really. Products are better, and competition is enormous." – Zach Holman
• It’s a way of revealing opportunities. “Everybody's drilling for oil in the same spot because some other guy found oil there already.” – Nick Quah. What’s everyone else missing? Where’s the untapped well?
• You’re stealing time, attention, and money from somebody, and it’s not always who you think!(Article) When Uber launched, they stole customers from the taxi industry. When the iPhone launched, Apple took customers from Kodak and the film industry.

How to think about the competition

• SWOT. What are their strengths? What are their weaknesses? What are their opportunities? What are their threats? Do SWOT on yourself too!
• User interviews. One of the best ways to do user research is to interview folks who are actively using the competition! What brought them to start using it? How’d they find it? What was going on in their life at that time? Why do they keep using it?
• When people switch. If people switch away from you to a competitor, that’s a great time to ask questions. "The only two people who can give you real feedback about your product are people who just purchased it and people who just canceled.” – Jason Fried
• Think about how you can outlast them. What are practices you can put in place that will help you outlast the competition? “Whenever a startup goes out of business, the first thing I get curious about are their costs, not their revenues.” – Jason Fried
• Figure out how you can make things easier.How can you make your app easier to use than the competition?
• Look for unmet desires. What are the unmet needs of users using competitors’ products? Search Twitter, support forums, etc for instances of people complaining. What are they complaining about?

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Show notes:

• Val Sopi's new startup: Claritask
• Podnews on Anchor and "podfading"
• Worrying about the competition is pointless
• How much should a startup worry about the competition?
• Seriously don’t worry about the competition
• How to think about startup competition
• Why I don’t stress about the competition 
• Does bootstrapping make you worry about the competition?
• Why reading about your competitors will hurt your business?
• Why you shouldn’t copy Basecamp
• How to outlast the competition
• Competing on easy
• When you’re building a product, whose opinion should you listen to?
• Why many products struggle, but only a few succeed.
• Who are you stealing from?
• Book: Creative Selection