How much to care about competition

Introduction

You’ve selling your product in an exciting and growing space, but you’re not going to be the only one who has identified the opportunity. How much should you worry about what other businesses are doing, and how can you stay ahead? In this post, I will

1. Discuss the importance of competition

2. Evaluate how much you should care about competition

3. Propose ways to research your competition and stay ahead

Photo by Matt Lee on Unsplash

1. Why competition is important

It’s natural to feel worried when you see a competitor succeeding. However,
“iron sharpens iron”. It is uncomfortable, but competition is good for several reasons:

  • Competition is growing the overall market share for everyone, especially if they’re causing net new merchants to consider products they wouldn’t have before. I’ve seen this in my experience selling to merchants who are making a big push into selling online for their first time. It’s positive if they have talked to a few online payment players, as that means they are serious about it and keen to learn more.
  • Competition helps your customers become more familiar with the products, which drives better conversations on ROI and value.
  • Competition helps you stay sharp. Your competitors help you reflect if you’re missing out on trends, product features, and what customers might not be telling you (or if you’re failing to listen).

So, before you get too invested in focusing only on how wonderful your product is, remember that you should know who your main competitors are, and consider how you’re differentiated.

2. How much should you care about the competition?

The short answer is “not too much.” It’s important to keep an eye on the competition, but not to be so obsessed to the point that you lose sight of your own product strategy. If you find yourself getting nervous about competitors consistently, it might be a sign that you’re veering into the worrying “too much” bucket.

That said, it’s also important not to ignore the competition. If you think your product is the best in every way, you have blind spots. It’s a good thing if you can honestly identify your weak spots and figure out whether to prioritize working on those, or other features on your roadmap.

Don’t compare the best of your product with the worst of your competitors. It might make you feel good, but it’s ineffective in the longer term. Instead, find the best thing about the competition, and make sure you honestly gauge how you’re doing vs them.

3. How to research your competition

Here are four tips for researching your competition. All four tips are about listening more than talking. It’s about listening to hear about the competition, but more importantly listening to customer feedback.

  • Talk to your customers and users. What do they think of your product compared to the competition? What advantages does your product have? Ask them to rate it on a scale — for example if Salesforce is a 8/10, and your product is a competitor, is it a 5/10 to them? Quantify the difference with your customer.
  • Listen to your sales and customer support team — they’re getting daily feedback with your customers and are a goldmine of insights. Understand from sales why they’re winning and losing deals. Understand from customer support why customers are threatening to churn or churning.
  • Read feedback forums. What are people saying about the competition? Are they happy with the products? Are there any features that people ask to see changed or improved?
  • Interview experts in your field (perhaps every 6 months as you review your roadmap). What do they think of the competition? Are they missing any features in your product? Personally, I love the Tegus platform for these interviews — it’s more affordable than other players in the market and provides a broad range of insights.

Conclusion

You’re not in competition with every business out there — you’re in competition with the businesses that are selling a similar product or service to your target market. It’s important to do your research and understand who your true competitors are and your differentiation.

Once you know who they are, it’s time to consider your product and GTM strategy, and what priorities you will stick to executing on. But after you decide, focus on execution and measurement. Don’t react constantly to whatever is happening — it’s a distraction.

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Celine Wee

Celine Wee

Musings are my own: a collection of learnings from Payments, Go To Market, Web3, Biz Ops across Stripe, Coinbase, Twitter