Healthy competition is a good thing. It drives innovation and brings benefits to customers. However, at times a product team might get obsessed with their competitors which leads them astray.
Keeping an eye on your competitors is one of the core product management activities. That's how we analyse market trends and improve our business strategy. As a part of the overall discovery effort, competitors analysis is a powerful tool. Yet, when studying competitors become your main activity or the main source of product ideas - you're in great danger to lose your way and ending up with a sub-par product.
When I think about the competitive analysis I think of racing (even though I am not a fan of the sport).
Way before going on track there are tons of things to do. Firstly, you need to know what kind of race it's going to be. You need to understand your industry, your market segment and the customers you're planning to serve.
Secondly, you need to know who are you racing with. It would be quite shameful to ride your horse on an F1 track. You got to be realistic here, even slightly pessimistic. It became quite fashionable these days to create your own race where you're the only participant. Sure, you'll finish first but who's going to want to see that?
Thirdly, planning the race itself. Knowing who you are and what you're capable of, and also understanding the strengths of your opponents - you can prepare for the race. Usually, it's never just a single race, it's a long season where you need both strategy and tactics. Some teams plan for the short term - winning the next race. While best teams plan for the entire season to lift the cup in the end.
Often a race will start with a warm-up. It gives participants a chance to "feel the track" and see their opponents in action. That's where your research faces the reality. In product terms, this could be many things: a "smoke test", MVP, sales calls/demos, signs up, churn, product reviews...etc. If you're new to the race - this step is crucial as you don't have any real race experience to benchmark yourself against.
You see the green light and you're off. Your race plan is in your head, so is the strategy for the season. However, now you're in the heat of the moment, your rivals are around you and you really need to perform. It's here where you'll be properly tested. You need to keep your head cool, remember your plan and the coach's instructions. It's here where many pilots struggle. Imagine yourself in the middle of the pack, say position ten. Obviously, you want to overtake position nine and avoid falling to position eleven. Such local battles could be fierce and captivating. You might spend a lion share of your resources beating your immediate rivals, forgetting it will only take you up a few positions while you're still going to remain in the middle of the table.
No matter where you finish in the first race - you'll need to analyse your performance and plan for the future. It is another pivotal moment that can decide whether you'll succeed long term. If you're new to the race you most likely not going to finish in the top three. You'll need to be brutally honest with yourself and realistically assess your chances in the coming battles. There is no shame to be in the mix, in the middle. You'll get your share of attention and fun of participation.
However, if you aspire for the podium you need a radically different strategy.
Analysing the performance of your immediate competitors and finding the tactics to overtake them might get you moving up in the ranking. However, competing like this might only get you in the top three or five. When you're there, things become much more difficult. Up top, everyone is equally matched and doing their best. Just following your immediate rival hoping they will make a mistake is a dubious tactic where you'll be overlaying on luck. To become the leader you'll need to take risks, to do something other pilots are not doing, to innovate.
It's here where extensive competitive research might be decremental to your chances of winning. Sure it's useful to look in the mirror from time to time, but mostly your eyes should be on the empty road ahead.
Unlike sport, the business race is never-ending. You don't even get to rest between the races, the competition is non-stop with ever-changing participants. That's another reason to prioritise your vision as the main competitive advantage. Or accept your place in the rankings when you focus on immediate rivals.
Maybe racing is not a perfect metaphor for business but surely product managers could learn a lot from it. Knowing your competitors is useful but we should not be obsessing over them. Rather, we need to have a vision for our product and business so we could lead and eventually open that champagne.
When I think about the competitive analysis I think of racing (even though I am not a fan of the sport).
Planning the race
Way before going on track there are tons of things to do. Firstly, you need to know what kind of race it's going to be. You need to understand your industry, your market segment and the customers you're planning to serve.
Secondly, you need to know who are you racing with. It would be quite shameful to ride your horse on an F1 track. You got to be realistic here, even slightly pessimistic. It became quite fashionable these days to create your own race where you're the only participant. Sure, you'll finish first but who's going to want to see that?
Thirdly, planning the race itself. Knowing who you are and what you're capable of, and also understanding the strengths of your opponents - you can prepare for the race. Usually, it's never just a single race, it's a long season where you need both strategy and tactics. Some teams plan for the short term - winning the next race. While best teams plan for the entire season to lift the cup in the end.
Test lap
Often a race will start with a warm-up. It gives participants a chance to "feel the track" and see their opponents in action. That's where your research faces the reality. In product terms, this could be many things: a "smoke test", MVP, sales calls/demos, signs up, churn, product reviews...etc. If you're new to the race - this step is crucial as you don't have any real race experience to benchmark yourself against.
The first race
You see the green light and you're off. Your race plan is in your head, so is the strategy for the season. However, now you're in the heat of the moment, your rivals are around you and you really need to perform. It's here where you'll be properly tested. You need to keep your head cool, remember your plan and the coach's instructions. It's here where many pilots struggle. Imagine yourself in the middle of the pack, say position ten. Obviously, you want to overtake position nine and avoid falling to position eleven. Such local battles could be fierce and captivating. You might spend a lion share of your resources beating your immediate rivals, forgetting it will only take you up a few positions while you're still going to remain in the middle of the table.
After the race
No matter where you finish in the first race - you'll need to analyse your performance and plan for the future. It is another pivotal moment that can decide whether you'll succeed long term. If you're new to the race you most likely not going to finish in the top three. You'll need to be brutally honest with yourself and realistically assess your chances in the coming battles. There is no shame to be in the mix, in the middle. You'll get your share of attention and fun of participation.
However, if you aspire for the podium you need a radically different strategy.
Leading vs competing
Analysing the performance of your immediate competitors and finding the tactics to overtake them might get you moving up in the ranking. However, competing like this might only get you in the top three or five. When you're there, things become much more difficult. Up top, everyone is equally matched and doing their best. Just following your immediate rival hoping they will make a mistake is a dubious tactic where you'll be overlaying on luck. To become the leader you'll need to take risks, to do something other pilots are not doing, to innovate.
It's here where extensive competitive research might be decremental to your chances of winning. Sure it's useful to look in the mirror from time to time, but mostly your eyes should be on the empty road ahead.
The wheels keep on spinning
Unlike sport, the business race is never-ending. You don't even get to rest between the races, the competition is non-stop with ever-changing participants. That's another reason to prioritise your vision as the main competitive advantage. Or accept your place in the rankings when you focus on immediate rivals.
Maybe racing is not a perfect metaphor for business but surely product managers could learn a lot from it. Knowing your competitors is useful but we should not be obsessing over them. Rather, we need to have a vision for our product and business so we could lead and eventually open that champagne.