Having strong competitors is good: they keep your product strategy fresh
December 14, 2010
I just read a short but insightful article on Venture Hacks titled “Always assume competition”. In the article, you can find many nuggets of learning for an aspiring expansion stage product manager, such as:
– Never assume you know everything about your competition. In fact, always assume someone is competing with you.
– Consider your competition seriously, but do not back out of a market because of competitors.
I would like to further explain the details of the second point. I recall a recent discussion with our investment associates concerning the current state of the markets. With the rapidly decreasing cost of starting up a business, there is always a multiplicity of startups hoping to address any given market. With the agile nature of today’s product management lifecycle, startups are constantly “pivoting” and experimenting with their products and services creating even more overlap and competition within the markets. Long gone are the days where a venture capital advisor was assured of a first mover’s advantage in a “greenfield” market. Competitors will always pop up, and most likely they will offer cheaper alternatives to undercut any perceived market leader.
Thus, we actually should embrace the crowded competitive fields. The more competitors try to market and flaunt their latest features/functions, the more free “intelligence” one can collect from their marketing and sales materials on the market’s needs. Each competitor’s product is a test of the market’s receptiveness and demand for a solution whose outcome is very easily ascertained. Fast moving competition also keeps your own sales team on its toes and ensures they will be looking out for competitive intelligence. It also gives your product management team lots of ideas on ways to improve your product.
These are just some of the many ways that competition can really keep your product strategy fresh, and your operations lean and running on overdrive. After all, such adrenaline rush is the secret ingredient to startup success.