Ryan's Rules #58: Always overestimate your competition
Every Friday morning at 8am we had an ongoing project implementation call with a client in Germany. It was an extended trial of our SaaS offering but we were on the path to conversion into production use. Each week, small niggles would be raised. We’d commit to them in our roadmap or else fix them or show the client how to resolve the problem on the call. Things were going great. This was one of a number of concurrent clients who actively trialling the product. We had a lot of early traction. The purpose built solution was very different to what everyone else was selling and was built with feedback from expert users. We had a spreadsheet built with every competitor in the space. "I think we're actually ahead," I said, scrolling through it. We were untouchable. That is, until the Friday morning when the client project manager joined the Zoom meeting alone and with a smile said “It’s not you, it’s us.”
They weren’t the only prospect that we lost out to either. Eight months later, two of our "behind" competitors were eating our market share like it was their breakfast. Their tech wasn’t better. In fact, it was a rehash of what had already been on the market for years at that point. Their sales guys weren’t secretly more advanced. When we said yes and meant it, they said yes but it was really a maybe. We had become complacent. We'd stopped updating the spreadsheet as soon as it told us what we wanted to hear.
This is the trap that "always overestimate your competition" is built to catch.
The Comfort Problem
Complacency brings comfort, but it creates blind spots.
Build It Into Your Operating Strategy
- Adversarial review. Pick one person, ideally not you, to argue the case for why a specific competitor could beat you in the next two quarters. Force them to be specific: better unit economics, faster shipping cycles, a hiring advantage. Vagueness will not help here, specifics will.
- Start tracking the competitors you've dismissed previously but keep hearing about. The startup that ate Blockbuster was a mail-order DVD service. Now that company is a streaming giant and a movie studio all in one. Nothing like where it started. Your most dangerous competitor probably doesn’t show up on your radar unless you start really looking.
- Separate confidence in your product from confidence in your position. You can believe deeply in what you've built while still believing someone else might be building it better, faster, or cheaper. Your product can be better than theirs and you can still lose. Your competitors could be excellent at selling snake oil. Look for every one of their advantages!
- Ask "what would have to be true" instead of "are they actually a threat." Change how you look at your competitors into a scenario-planning exercise. This will keep your team thinking on its toes instead of reassuring itself. What if your best salesperson walked out of your business and into theirs?