When I first started creating pitch decks, every example had a competition slide that showed:
Nobody was doing what they were doing;
Nobody was addressing their markets; and
They were better than every competitor in every way, shape and form.
Initially, I thought it was right, but revisiting this mindset, after years of experience and loads of reading, I’m not so convinced anymore.
Mind > Matter? 👀
I love passionate founders, ready to change the world. But, if your product is better than every competitor’s, then why haven’t you dominated your market? Why do over 90% of startups with these decks end up failing?
This short video sums it up nicely:
Unpopular Opinion 🤷♂️
Peter Thiel is famously quoted saying “Competition is for losers”. I partially agree with the sentiment, but in another sense “everyone has competition” - the question is whether you know it. When a startup claims to solve the “unsolved”, there is always an alternative, for example:
Your competitors may lack elegance and simplicity, but they still exist. Before Airbnb, you could still sleep at hostels or expensive hotels. You could also couch surf, rent, purchase timeshares or even sleep in the street. No competition is desirable; however, in reality, a substitute is present in some regard even if it’s not appealing.
Where’s My Competition? 🕵️♂️
Harvard Business School’s Professor Clayton Christensen is a leading thinker in frameworks for disruptive innovation. His book, “Competing Against Luck”, begins by demonstrating that:
Customers use products for a variety of reasons;
Each reason exposes a new competitive landscape; and
Understanding the above improves your ability to innovate.
Consider ginger beer, for example:
My wife drinks it reduce her nausea whilst pregnant.
Competition: other remedies and medicines for nausea.
I often see friends buy it for parties as a nice drink.
Competition: other drinks in the supermarket.
I love it mixed with spiced rum, as an excellent mixer.
Competition: every other alcoholic mixer.
Five seconds on Google reveals it’s also great for making a cake.
Competition: Other potential cake recipe ingredients (e.g. carrot, apricot, lemon, bananas, etc.).
The same is true in tech. Netflix is assumed to compete against Disney+ and Amazon video. But, on date night, it also competes against the bowling alley, rollerskating and dance classes. Netflix CEO Reed Hastings has even said his biggest competitor is sleep - because, at night, both options exist.
Do’s and Dont’s 📝
✅ Understand why customers use your product. Use this to inform you about your competition.
✅ Develop an accurate picture of your competition - even if it’s in the form of several workarounds.
✅ Change your product with an awareness of different customer use cases and competitive landscapes in mind.
🚫 Don’t obsess over the competition - obsess over the customers and the problems you’re solving.
🚫 Don’t blindly copy competitor solutions - without regard to your diverse customer base and the broader competitive landscape.
🚫 Don’t deny you have competition because you have a USP / Competitive Advantage.
Book Extracts 🤓
📚 Book - The Hard Things About Hard Things:
There may be nothing scarier in business than facing an existential threat. So
scary that many in the organization will do anything to avoid facing it. They will
look for… any excuse… I see this often in startup pitches…
Entrepreneur: “We have the best product in the market by far. All the
customers love it and prefer it to competitor X.”
Me: “Why does competitor X have five times your revenue?”
Entrepreneur: “We are using partners and OEMs, because we can’t build a
direct channel like competitor X.”
Me: “Why not? If you have the better product, why not knuckle up and go to
… If you find yourself running when you should be fighting, you need to ask yourself, “If our company isn’t good enough to win, then do we need to exist at all?”
Food For Thought 🍽
Yesterday, I played a game of chess with Brian, an older man I randomly met. The game was long and fun. I thought I was winning, but eventually, I lost. But I was exposed to the threats I didn’t even realise existed.
Interview your customers;
Understand why they use your product; and
Determine, who are you really up against?
📚 Book - Competing Against Luck - Must Read!!!
For a better understanding of competition, and disruption, pick up this book and read it!
Jobs To Be Done (JTBD) Framework - If you can’t get the book, study this framework.
What Am I Doing? 👨💻
2020, has been challenging. Taking time off work to rest, reflect and plan.
Using some no-code tools - will hopefully write some on their power shortly.
Yesterday, I built the landing page for a new project. I’m also reaching out to early customers to gauge interest and understand their needs (more details next week or follow on Twitter for regular updates); and
We’re at over 200 subscribers - thanks to everyone who’s been sharing the content!
I’m also speaking to some fantastic founders about featuring as case studies in the occasional newsletter (I have about 50 requests so far). If you want to be featured or know anyone that you think I should interview, get in touch at email@example.com;
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