Competitive Analysis Done Right! ✅

At some point, you will need to do a competitive analysis to see where your product stands with regards to the competition. Let's dig into this further.

Hi everybody - An important part of building products is having a keen awareness of what other products (aka the competition) customers are likely to be using that solve similar problems. There is a right way to do this competitive analysis. There is a wrong way to do this. In this post, let’s talk about the right way to do this! 😀

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The following video dives into the relevant details:

To summarize the video, at some point, you will have had to do a competitive analysis to see where your product stands with regards to the competition. Here are four quick tips to make sure you are performing the analysis correctly.

1. Focus on the Right Features

First, identify the features you want to compare against. Legacy products may have hundreds or thousands of features. The subset of features that probably matter for the customer segment you are going after may be much smaller, so be precise in the features you are comparing against. There is little value in seeing your product highlight a bunch of gaps in comparison to your competition that you’ll never actually address.

2. Look Beyond (Just) Features

Second, a good competitive analysis isn’t just a feature comparison. If you look at popular examples of products in recent memory that upstaged a more established competitor, they didn’t succeed because of their more robust feature set. Good competitive analysis should describe more subtle differentiators around marketing, target audience, price, distribution strategy, and more:

My favorite area to compare against is How quickly can a user go from launching the product product to accomplishing a task. You can measure this with time, number of mouse clicks, etc.

3. Product Thinking and Strategy Still Needed

Third, competitive analysis is a moment-in-time snapshot of where things stand in your industry. It will not tell you what your competitors are going to do next. It also won’t tell you what are all the experiments and approaches they’ve attempted and learned from that validated their current path and will influence their next steps.

Reading too much into what competitors are doing is similar to the following XKCD comic where you are interpreting points in a graph:

Notice how the same data can be interpreted in various ways. Every person who looks at this data will have their own interpretation (often influenced by their particular biases and agenda), so don’t base your entire roadmap or understanding of the future on what your competitive analysis shows.

4. Not a Substitute for Customer Understanding

Fourth, and probably the most important point, competitive analysis is not a substitute for building your own intuition for what your product does well, what its gaps are, and what improvements you should focus on next.

The best way to get this intuition is to talk to your customers:

Use direct and indirect ways understand deeply what their pain points are and how you can make those pain points go away.

Till Next Time

The output of a competitive analysis exercise is one of the many data points you should consider when deciding how to evolve your product. Hopefully, this post helped highlight how to perform this exercise well and avoid over-indexing on its benefits.

If you’d like to discuss this topic further or suggest ideas for future topics, post in the forums, or add a comment by replying to this message.

Cheers,
Kirupa ⚗️