I have heard people make the argument that startups shouldn’t think about their competitors. I agree that many spend too much time worrying about how their feature set stacks up against another offering’s feature set. On the other hand, prospects are evaluating your solution against alternatives (which may not be products) and communicating how you are better than those alternatives is a key part of great startup marketing. Simply put – you should care about competitive alternatives if your prospects do.
Startups are not Big Companies
I very rarely see useful competitive analysis done by startup marketers, mainly because they are trying to do it like big companies do it. The big companies I’ve worked for have had departments dedicated to creating large detailed check mark matrices that showed how our feature set compared to competitive offerings. These matrices almost never included any feedback from customers. Needless to say, the products and their markets were very mature.
This approach completely falls apart within the context of a startup. Your competitors, from a customer point of view are almost never so easily defined. For startups, your offering is often competing with “do nothing”, “hire someone to do it”, use spreadsheets/documents/paper, or some other solution that might be completely unsuited to the task but is free/easy/what has always been used. Comparing features of one of these alternatives to your startup’s offering to makes absolutely no sense in this context.
A More Customer-Centric Approach
In the context of a startup the only competitive analysis that makes sense is the one that is happening in side the heads of your prospects. The more you understand about that, the more you can use that knowledge to improve your marketing.
Instead of the traditional competitive comparison matrix, a more useful competitive alternatives snapshot for a startup would look at what customers perceive to be the major benefits of the alternative, what risks they see that might stop them from choosing your solution and how you might address these issues in your messaging.
An Example
Here’s an example for CRMster, a fictional solution aimed at mid-sized consulting businesses to help them manage their customer information. The points here are just to give you some ideas about how this might look:
Competitive Alternative | Benefit customers perceive | Risk in selecting your offering | Value of your offering | Proof points |
Do nothing – we don’t use a CRM tool and that’s fine by us | Free Zero effort required |
Budget spent on this will mean less money for other thingsConsultants will have to learn the tool and record data they don’t today | More accurately predict future workloads so you can budget/staff accordingly and increase your profitability.Gives consultants access to more complete customer information making it easier to do their jobs. | 3rdparty data: Research shows companies using CRM are X% more profitable.Customer data: CRMster customers have x% average increase in revenue/profitabilityEnd user quote “CRMster makes collaborating easy. I want to marry it! ”Customer case studies |
Manage customer data in spreadsheets | FreeEveryone knows how to use a spreadsheet | Budget spent on this will mean less money for other thingsConsultants will have to learn the tool | Eliminate the need to consolidate spreadsheets – a process that is time consuming and introduces errorsEasier, more effective team collaboration means projects are delivered on time, on budget. | Customer quote: “Consolidating spreadheets was a pain and our data stank. CRMster lets us accurately forecast our business.”Customer quote: “CRMster got our teams working together better so we could deliver projects on budget”End user quote: “So fun to use I gave up playing Angry Birds at work!”Analyst opinion: “Folks using spreadsheets are big losers” |
Use CRMFree, a free CRM tool | Free | Budget spent on this will mean less money for other things | Expert customer supportProvides features for consulting companies that generic CRM tools don’t have. | Analyst data: X% of CRM deployments fail because end-users don’t get good support.Customer quote: “Their support is so great we send them chocolates on valentine’s day”Press quote: “If you are a consulting company you are an idiot if you buy anything else”Customer logos, case studies |
Use BigWig CRM, a CRM tool for mid-sized businesses of any type | A safe bet: an established brand | CRMster might go out of businessThe software might be unproven, buggy crap | CRMster is way cheaper.Provides features for consulting companies that generic CRM tools don’t have. | Pricing and guarantees.Screen shots, product demosTeam bios – emphasizing successes and background in this market.Investor profiles, investment announcementsCustomer logos, case studies |
For this example, only the last couple of rows get into any discussion of product features and even there those aren’t the only considerations. The other thing to notice is that the feature discussion can happen as part of a higher-level theme (we’re better because we are cheaper, more targeted to this market, or a more elegant solution) rather than a checklist of niggley esoteric features like you would for mature products in a mature market. If you are going head to head with an established player in the market you’re doing it because you have something radically different.
The Output: Better Messaging
The next step is to look at the themes and develop key messages that highlight your differentiated value while addressing the potential big concerns. I’ve written about messaging here and here and I’ll talk more about how you would take the next step and construct messaging upcoming post.
Love this post.
I think people get confused between looking at competitors in some mis-guided attempt to figure out what to build in their products rather than talking to their customers to find out whether or not the products or features are even relevant.
(also, just recently found your blog and am really enjoying it)
Hi Paul,
Thanks for the comment.
That’s exactly it. The only reason you care about competitive alternatives is when your customers are considering them over your product when they are buying. In very mature products, small features might make a difference, but they rarely do for startups. The bigger thing you have to worry about is overcoming the larger issues (I don’t have budget, I will have to change the way I do things, etc.) which is as much about marketing as it is product (in many cases moreso).
April
blog post: Startup Marketing: Does the Competition Matter? http://t.co/CVO4iGW0
Startup Marketing: Does the Competition Matter? http://t.co/JXxynASg #productmarketing
Startup Marketing: Does the Competition Matter? http://t.co/uO7z6sVq
+1 RT @aprildunford: blog post: Startup Marketing: Does the Competition Matter? http://t.co/dDLtGf0y
RT @aprildunford: blog post: Startup Marketing: Does the Competition Matter? http://t.co/MYxT3ZSx
blog post: Startup Marketing: Does the Competition Matter? http://t.co/CVO4iGW0
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/rzN4t4QP
blog post: Startup Marketing: Does the Competition Matter? http://t.co/CVO4iGW0
blog post: Startup Marketing: Does the Competition Matter? http://t.co/CVO4iGW0
Great advice and a shot in the arm for start ups by @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/HsZXQq9A
Great advice and a shot in the arm for start ups by @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/HsZXQq9A
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/KH6HAf5X
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/KUKmfalx /nope, it's all about the customer..great read
Startup Marketing: Does the Competition Matter? – Prospects are evaluating your solution against alternatives (whic… http://t.co/AQb5S7Mb
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/8VbKzpsH
Customer-Centric Approach #competitive RT @aprildunford: blog post: Startup Marketing: Does the Competition Matter? http://t.co/ba9DStaF
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/Kqv4rv6n vía @alvarezval
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/cWE6eZUr vía @alvarezval
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/oWNNi520 vía @alvarezval
Startup Marketing: Does the Competition Matter? http://t.co/CVO4iGW0 On competitive positioning for startups #prodmgmt
Startup Marketing: Does the Competition Matter? http://t.co/CVO4iGW0 On competitive positioning for startups #prodmgmt
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/aHAhuD63 On competitive positioning for startups #prodmgmt
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/ZkToGJLu On competitive positioning for startups #prodmgmt
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/aHAhuD63 On competitive positioning for startups #prodmgmt
Startup Marketing: Does the Competition Matter? http://t.co/XbgIuEJU via @blissstream
Marketing en startups: importa la competencia? http://t.co/RYgr1zir via @aprildunford
Marketing en startups: importa la competencia? http://t.co/RYgr1zir via @aprildunford
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/ZkToGJLu On competitive positioning for startups #prodmgmt
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/Kqv4rv6n vía @alvarezval
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/oWNNi520 vía @alvarezval
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/LaPJUSjO vía @alvarezval
Another spot-on product marketing post from @AprilDunford http://t.co/XrVgVfDC
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/kVVDiifP On competitive positioning for startups #prodmgmt
Startup Marketing: Does the Competition Matter? http://t.co/HKwa0ljB
Startup Marketing: Does the Competition Matter? http://t.co/3ERhEgEB
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/cWE6eZUr vía @alvarezval
RT @dmillerconj – Marketing New Solutions: who's the competition? A customer-centric approach for innovative startups http://t.co/DEaRazPx
Startup Marketing: Does the Competition Matter? http://t.co/kXMzAxYU via @aprildunford #messaging #startups
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/LaPJUSjO vía @alvarezval
Very interesting article…"How Much Do Competitors Really Matter in the Startup World?" http://t.co/PufhWtSk
Blue Ocean=Myth “@JonathanCKay: Very interesting article.."How Much Do Competitors Really Matter in the Startup Wrld?" http://t.co/lGbpCLdY”
[…] Many startups worry about the competition but April Dunford argues the biggest priority should be potential […]
Startup Marketing: Does the Competition Matter? http://t.co/bSzvH983
Startup marketing – does the competition matter? http://t.co/utSL6H3j
Startup marketing – does the competition matter? http://t.co/YtM1fTXX
Startup marketing – does the competition matter? http://t.co/utSL6H3j
#Startup #Marketing: Does the Competition Matter? http://t.co/VdWbcgKz by @AprilDunford #ProdMktg
#Startup #Marketing: Does the Competition Matter? Startups are not #Big #Companies. A More Customer-Centric Approach. http://t.co/w35R3C7c
#Startup #Marketing: Does the Competition Matter? http://t.co/VdWbcgKz by @AprilDunford #ProdMktg
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/Cm4bxjr8
Startup Marketing: Does the Competition Matter? http://t.co/nMIKT9KE
Startup Marketing: Does the Competition Matter? http://t.co/kUzd60R8
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/75ZHSHzn #startups – Insightful read!
Does the Competition Matter? @aprildunford says yes, but maybe not in the way you might think: http://t.co/0O6hFPfy
Startup Marketing: Does the Competition Matter? http://t.co/lXlcC9ok
Startup Marketing: Does the Competition Matter?
http://t.co/QUckZ85S
Startup Marketing: Does the Competition Matter? – http://t.co/wRY6zghx via @aprildunford
[…] Tags: competition , featured , marketing plan , Messaging , startup marketing Category : Messaging , Startups The next step is to look at the themes and develop key messages that highlight your differentiated value while addressing the potential big concerns. I’ve written about messaging here and here and I’ll talk more about how you would take the next step and construct messaging upcoming post. The Output: Better Messaging For this example, only the last couple of rows get into any discussion of product features and even there those aren’t the only considerations. Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups […]
Startup Marketing: Does the Competition Matter? | Rocket Watcher: Product Marketing for Startups http://t.co/F6I14aRD
Startup Marketing: Does the Competition Matter? by @aprildunford @ Rocket Watcher: Product Marketing for Startups http://t.co/TlBhOl3I
Startup Marketing: Does the Competition Matter? http://t.co/4nBO1jzk
Startup Marketing: Does the Competition Matter? http://t.co/yPibJi93
Startup Marketing: Does the Competition Matter? http://t.co/mbQHGxYx
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/GiEJtHCN
RT @aprildunford: Startup Marketing: Does the Competition Matter? http://t.co/T1JMb8rx
"Is your startup really worth anything before you’ve settled on your exact offering?" http://t.co/kUndpkfA via @aprildunford
Startup Marketing: Does the Competition Matter ? http://t.co/mbQHGxYx
Startup Marketing: Does the Competition Matter ? http://t.co/4nBO1jzk
Startup Marketing: Does the Competition Matter ? http://t.co/yPibJi93
Startup Marketing: Does the Competition Matter ? http://t.co/yPibJi93
Startup Marketing: Does the Competition Matter ? http://t.co/mbQHGxYx
Startup Marketing: Does the Competition Matter ? http://t.co/yPibJi93
Startup Marketing: Does the Competition Matter ? http://t.co/mbQHGxYx
Startup Marketing: Does the Competition Matter ? http://t.co/mbQHGxYx
Startup Marketing: Does the Competition Matter? http://t.co/INnT1aJv
Startup Marketing: Does the Competition Matter ? http://t.co/mbQHGxYx
Provides context & insight RT @JasonJacobsohn: RT @martinsoorjoo: Startup Marketing: Does the Competition Matter ? http://t.co/kD6EPRXl
Doest he competition matter in #startups #entrepreneur http://t.co/oA1f7AxL #Boston
Startup Marketing: Does the Competition Matter? – http://t.co/mGl7RPSm
Startup Marketing: Does the Competition Matter? – http://t.co/5Hs5mB4s (via @dcancel)