Like it or not, there’s no escape. As a Product Manager, you need to have an in-depth knowledge of the market and industry in which your product adds value and competes. And this includes having a deep understanding of the competitor landscape.
What competitors should I keep an eye on?
If you don’t know who your competitors are: first, don’t say it out-loud; second, find them out asap.
Tip: search “[your product] vs” and “[competitor] vs”; you’ll find a good list quite fast.
Competitors can be:
- Direct — solving the same problem and addressing the same users; users have to choose between you and them
- Indirect — solving the same problem but in a different way; different target users
- Potential — offering something to the same target users; not solving the same problem
- Substitutes — solving the same problem but not angled in the same way at all
What should I evaluate on each competitor?
Knowing the names of competitors is not enough. You’ll need to analyze them.
There’s no right way to do competitive analysis. But, if you decide to evaluate everything, it can turn into a time-consuming vortex, and it will be hard to make any sense of it.
You should rely on a framework that identifies the distinctive competencies of each organization. It will keep you focused, allow easy comparisons, and help anyone else contribute productively.
I like the framework proposed here. It suggests that you focus on evaluating each company on these 5 criteria:
- User Base — as companies with large user bases have big market advantages
- Brand — as the perception people have of companies and the products they sell can determine what they can do in the future
- Design — as people are more inclined to use products that are well thought out, easy to use, and aesthetically pretty
- Product Team — as better teams (not necessarily bigger) have more out-perform capabilities
- Speed — as execution agility is crucial to beat new markets, features, and user bases
How about feature comparison?
Feature comparison alone is tricky. It might push you to focus on feature parity with your competitors, and that is not enough. If you blindly copy what they’re doing, you’ll always play catch up. Your industry is continuously moving, and you must create a product for where the market will be tomorrow, not where it was yesterday.
I’m not saying you shouldn’t dig deeper and analyze the competitor’s product themselves. You should definitely do it, especially for the direct competitors. But it’s not about specific features; it’s about the ability of products to meet user needs.
I like the framework proposed here. It suggests that you focus on evaluating each product on those capabilities.
- Needs — the desired outcomes for your personas (you should have this list already)
- Capabilities — what the product needs to do for those needs to be addressed
Am I done now?
You’re never “done” with competitive analysis. While a particular exercise might have an endpoint, there’s always something new to keep up.
Competitors are always going to be there, and, like you, your competitors will change. They’ll take initiatives to improve and get more ground, but they might also make mistakes and lose some ground. As soon as they make a change, you’ll want to redirect and adjust.
Many tiny things can happen with your competitors, and they are all worth knowing. But, if you decide to track every single thing, again, it can turn into a time-consuming vortex.
I like the framework proposed here. It suggests that you keep an eye on these 3 event types:
- Funding — as more money most likely means changes on the way
- Acquisitions — as at least the product team will probably change
- Bigger Launches — as it means changes/new features, and it might mean that a competitor moves from potential to direct (e.g.)
Tip: Set alerts on Crunchbase, Twitter, Google Alerts or Mention… Don’t be embarrassed. Your competitors are doing the same thing, too.