Like it or not, there’s no escape. As Product Managers, we need to have an in-depth knowledge of the market and industry in which our 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 we don’t know who our competitors are: first, we shouldn’t say it out loud; second, we should find them out asap.
Tip: search “[product] vs.” and “[competitor] vs.”; we’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 us 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 we evaluate on each competitor?
Knowing the names of competitors is not enough. We’ll need to analyze them.
There’s no right way to do competitive analysis. But, if we decide to evaluate everything, it can turn into a time-consuming vortex, and it will be hard to make any sense of it.
We should rely on a framework that identifies the distinctive competencies of each organization. It will keep us focused, allow easy comparisons, and help anyone else contribute productively.
I like the framework proposed here. It suggests that we focus on evaluating each company on these 5 criteria:
- Userbase — 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 us to focus on feature parity with our competitors, and that is not enough. If we blindly copy what they’re doing, we’ll always play catch up. Our industry is continuously moving, and we must create a product for where the market will be tomorrow, not where it was yesterday.
I’m not saying we shouldn’t dig deeper and analyze the competitor’s products themselves. We 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 we focus on evaluating each product on those capabilities.
- Needs — the desired outcomes for our personas (we should have this list already)
- Capabilities — what the product needs to do for those needs to be addressed
Are we done now?
We’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 our product, our 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, we’ll want to redirect and adjust.
Many tiny things can happen with our competitors, and they are all worth knowing. But, if we decide to track every single thing, again, it can turn into a time-consuming vortex.
I like the framework proposed here. It suggests that we 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. Our competitors are doing the same thing, too.