In my Product Management profession, there are times when I don’t care what the competition is doing.
There, I said it.
Have you ever encountered The Hysterical Salesperson? Sending me every press release of every $5m never-to-be-profitable competitor is NOT competitive intelligence from the battlefield. I suppose this post is my response to those unnamed colleagues of past, present & future.
Features don’t matter.
If your emphasis is on the feature list of your competitor’s product, you probably don’t gain much. Even for those competitors’ products you can get your hands on, are you really gaining an understanding of the product architecture? Yet it’s the architecture and not the features that will define the contents of your competitor’s future releases. Trust me, I’ve never been so constrained in delivering new features as when an architecture held me back. And your competitors are no different.
Inertia is your friend.
Whatever your competitor’s position, it probably isn’t going to change.
Small companies only have enough money to see their v1.0 vision come to fruition. If they don’t get it right (and most don’t), they’re probably screwed. This is their inertia.
A footnote: I was with a company that did a re-start and defied the odds, outlasting 20+ other vendors along the way. Rewarding, yes. Likely, no.
Large companies suffer from inertia too. It’s the resistance to change and the “curse of being big”. If they manage to make a big change, it’s probably on the basis of a major acquisition for which it will take them 12-24 months to figure out what the new, combined company really means.
Competitive analysis or Win/Loss analysis?
To get a sense of the pablum that passes for competitive intelligence, look no further than the epic anti-trust battle when Oracle tried to acquire PeopleSoft. The data that was posted on the Department of Justice’s website was a never-before peek into the inner workings of the high tech industry. Witness one particular example here; those “insights” would be rendered obsolete with either vendor’s next release.
Win/loss analysis, on the other hand, gives insight into the customer’s buying criteria. If your competitor’s product has features that a customer wants to buy, then it’s the customer insights that led you to this fact.
“Me too” = “too late”.
Yes, you might need to follow your competitors’ moves in order to satisfy customer needs. But if you do, you are by definition not differentiated. And therefore you’re not going to make a lot of money being second (or third) into the market with the same thing.
Differentiation does not mean that you have every feature a competitor has, PLUS some more. It means you have a means to serve that customer in a better way. Or perhaps you have a slightly different customer in mind.
Which leads me to my next point.
What really matters (sometimes it’s features).
Your customers matter. You are in a race to understand them better than any competitor. In that regard, win/loss analysis is invaluable, because it’s focused on the needs of the customer and who’s serving them better. But there are so many other things to be done to arrive at true understanding of your customer.
You’re also in a race to drive change better and faster that your competitors. Remember competitor inertia? It’s only a friend if you can drive change in your company. The change I’m referring to is applying that customer understanding to your product roadmap, your positioning & messaging, your mergers & acquisitions strategy…..pretty much everything the company does.
Influencers matter: perception is reality
Analysts, product reviewers and other types of influencers matter. But let’s be clear about their influence.
Some will set functional criteria, especially product reviewers. These deserve your attention if your customers use these reviews. But be honest about the reviews that matter and those that are noise.
Lots of analysts don’t dwell in a world of features. My good friend Paul Stamp was an analyst at Forrester Research. His customers’ inquiries about vendors didn’t focus much on their features. Rather, customers were looking for vendor “fit”. Did this vendor serve customers like me?
P.S. to Paul: more bloggery please.
Ask yourself: are my user personas in order? Does the company know and love them? How am I measuring user experience? User satisfaction? Influencers’ temperature?
You’d think I don’t pay attention to competitors. You’d be wrong. I spend enough time on competitors to get a sense of who they are. What their DNA is. This will explain 80% of what their future holds. And getting a higher-fidelity read on them requires a lot of time & money and the appetite to sustain that effort over long periods of time. Most of us just don’t have the will.
I respect competitors, but I don’t fear them. They have their own warts.