How entrepreneurs should think about the competitive landscape for their venture.
All startups operate within a landscape of competitors and alternatives. One of the worst things an entrepreneur can say to a venture investor is “And best of all, we have no competition!”.
There is competition for everything. If you claim you have no competition then that either means there is zero demand for what your startup does, or it means you don’t know how to use Google search. Either way, you look like a fool.
In fact, competition is usually a good thing. If there are other companies successfully selling something like what you’re selling then that means there is established demand what what you offer. Now you just have to be better/different in some way. That’s much easier than having to create demand for a product where there is no existing demand.
Think about Zoom. When they launched, everyone said they were crazy because the video conference category was already “owned” by Skype, WebEx, GoToMeeting, Google Meet, etc. They said a new video conference startup would never succeed in a category with so many big competitors. Today Zoom is the market leader, with a market capitalization of $49 billion. Because they figured out their positioning within the landscape and they executed on that positioning relentlessly.
Remember that sometimes competition isn’t other companies, it’s alternative ways to solve the problem you solve. When you think about your competitive landscape think about alternative ways of doing what your startup does, in addition to other companies.
I often see entrepreneurs put into a pitch deck the old “feature checklist” slide and think that’s their competitive landscape. The slide proudly shows the features they have, compared to the features their competitors have. But that’s a completely useless slide. It doesn’t really tell me anything about your positioning in the market, and it assumes that the product with the most features will win (which is almost never true).
Remember: Engineers develop features, but customers buy benefits. Don’t put a boring feature checklist slide in your pitch deck. It’s meaningless.
Instead, figure out a way to draw a visualization of the landscape of competitors and alternatives within which you operate. Place each of the players (including your venture) as they would fit within that visualization. Remember, competition is a good thing, so don’t be afraid to put a lot of competitors on there (in the retail world, for example, there’s room for Target, Nordstrom, and Costco, but they occupy different spots within the retail landscape).
If it’s possible to represent the landscape across 2 dimensions this often provides a nice clear way to envision how you and the other players fit in. One axis could represent price, and the other one could represent a focus on durability. Or one axis could be consumer-focus vs enterprise-focus, and the other could be bandwidth consumption. Below is an example:
Hopefully you’ve already done comprehensive research on competitors and alternatives. Put those into a single spreadsheet, so that you can look at them regularly, add new ones as they appear, etc. Now figure out how you would draw a visualization of the landscape, and how you fit in.
My 2-dimensional space is just an example. There are many ways to create a visualization of how you fit in to the competitive landscape. But don’t pretend you have no competition, and don’t think that a feature checklist means anything.
Every venture operates within a landscape of competitors and alternatives, and every great startup CEO knows that positioning matters. Create a slide that demonstrates that to others.