Comparing Competitor Functionality

David Cummings on Startups

Most startups have an arch enemy and only a handful of other serious competitors. While markets might seem crowded from the outside, on the inside there are usually just a handful of companies that compete on a regular basis. One caution with an arch enemy is to not get caught up in the functionality arms-race. That is, don’t blindly copy new competitor functionality just because they’re boasting about it.

Here are a few thoughts on competitor functionality:

  • Competitors might be positioning themselves for a move in a different direction (e.g. to a different vertical, up market, etc), so analyze the potential motives
  • 5-10% of functionality added by a competitor will actually not be useful (e.g. they’ll make a big splash about the new functionality but customers won’t actually use it for a variety of reasons)
  • Listen to customers, especially ones that best represent the ideal customer, and deliver new functionality…

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