Know Your Competition – Comparing Products Part 6

You start with a point of view about what makes a minimum viable product.  When your product launches, it is your customer’s point of view that matters.  You must understand which problems your customers care about solving, and what solutions are available to your customers today.  You need to understand your competition to make informed decisions about your product.  This is the latest in a series on comparing products – jump back to the beginning of the series to catch up, we’ll wait.

Overall Product Comparison Process

This is a relatively long series.  Each article will start with a recap of the overall process.

Getting useful information from comparing products requires you to:

  1. Introduction & Overview (so that the step-numbers align with the article numbers)
  2. Identify your customers.
  3. Articulate the problems they care about solving.
  4. Determine how important solving each problem is, relative to the other problems, for your customers.
  5. Characterize how important it is for you to solve the problems of each group of customers.
  6. Discover which (competitive) products your customers consider to be your competition. (This Article)
  7. Assess how effectively each competitive product solves each important problem.
  8. Assess how effectively each competitive product solves each important problem, for each important group of customers.

With this information, you can create a point of view about how your product compares to the others.

No Competition

If you think your product has no competition, you’re wrong.

The photo above shows an El Camino, a combination of a car and a truck.  The front of the vehicle, the cabin interior, and the overall height / profile of the vehicle is that of a car; but the vehicle has a tailgate and a truck bed for hauling stuff.  A pretty novel idea at the time.  There were no other car-truck combination vehicles, but that doesn’t mean the El Camino had no competition.

You should not define competitive products as the products that exactly match the features of your product.  You should not define competitive products as those that solve (exactly) the same set of problems that your product solves.  Every interesting problem already has a solution – and therefore, you have competition.  It may be that there are not any particularly good solutions in the market.  It may be that the competitive products are not well known, and would not be likely to compete effectively.

It may be that the solution your customers choose is “deal with it.”  The “deal with it” solution, at first glance, from a B2C (business – to – consumer) perspective feels like “there is no competition,” but I believe that embracing that point of view puts you at risk of being myopic about your market.  In the B2B (business – to – business) area, “deal with it” is one version of the “in house solution” competitor – a very real scenario.  Stacking ridiculous amounts of stuff on top of your car is analogous to managing your accounts receivable in a spreadsheet.  You can do it, but it is a solution that is fraught with other risks.

Your customer generally has four options from which to choose when deciding if they should buy your product.

  1. Buy your product.  Hooray.
  2. Buy someone else’s product.
  3. Build their own solution.  Your customer believes that rolling their own is a better alternative to purchasing a solution from someone else.
  4. Deal with the problem.  The cost of the solution is believed to be higher than the cost of the problem.

How do you identify which products are compelling competitors?

Problem Abstraction

One thing you learn as a product manager, when eliciting requirements, is to keep asking “why?” (and more and more on asking “why?” – check out the comments on these articles).  The goal in elicitation is to find the actual underlying problem, and not just the obvious manifestation of the problem.  One technique you can use is to create an Ishikawa Diagram that helps you define the problem(s) your product is attempting to solve.

Your goal is to find the right level of abstraction at which to determine who your competition is.  If we consider Tim, the hi-tech prosumer who consumes niche content, we would see that the decomposition of his high level goals looks like the following:

[larger image]

There are several benefits to using this approach of describing the decomposition of Tim’s goals:

  1. You get traceability of your requirements, allowing you to see why each goal matters, from Tim’s perspective.
  2. The graphical layout forces you to be concise in how you describe Tim’s goals.
  3. You have a framework for validating that you have defined the complete set of requirements needed to satisfy Tim.
  4. Looking at “everything” in one view helps you assure that your requirements are consistent.
  5. You know “when to stop” in decomposition when your requirements are atomic.
  6. You have a framework for assuring that you focus on those goals that Tim is passionate about.
  7. You have tractable goals that you can use to think outside of the box when identifying competitors.
  8. You have a clear and visceral tool for communicating with your team, to inspire innovative designs and clever solutions.

Finding Competitors

Some of the competitive solutions will be very straightforward, and obvious based on your understanding of your product domain.  Others you will discover through research.

When we look at the Kindle Fire as a product, we know from Amazon’s positioning that Tim will be able to read books & magazines (in color), consume multimedia content, browse the internet, stream movies, and borrow books.  He’ll have access to “millions of books,” be able to “read anywhere,” and connect with people over email from the device.  The Barnes & Noble Nook Tablet is positioned directly as a competitor to the Kindle Fire (and can even be purchased through Amazon).

It is occasionally annoying to read reviews of the Kindle Fire that basically say “not an iPad killer,” where the reviewer compares the features of the Kindle Fire, a single purpose device with multiple capabilities, with the iPad, a multi-purpose device that can be used for (many) single purposes.  The iPad is a viable competitor for the Kindle Fire, but a comparison in the other direction does not make sense.  The products are asymmetric substitutes – they are only substitutes for each other in a particular context.  If you are Tim, trying to enjoy niche content, then the iPad is a viable competitive product.  If you are a 15 year old boy who wants to play a first person shooter when you’re being shuttled to soccer practice, the Kindle Fire is a non-starter.

Finding a needle in a haystack is easier than identifying competitive products.  You know there is only one needle – once you find it, you stop looking.

Identifying competitive products is more akin to finding out how many needles are in the haystack

You can do research on the internet – start with the positioning from already identified competitors, look for editorials, rumor articles, reviews, research papers, customer reviews, discussion forums.  Search social media streams – find conversations (and broadcasts) about the product and the domain.  This gives you either minimal or overwhelming information, depending on how many competitors are already positioning themselves as products in this market segment.

Interview people who share goals with your personas – they don’t have to match your personas (but they can) – you are trying to discover solutions that you don’t yet know about.  Find out how they address those goals.  Maybe they use a web browser on their desktop computer, cobbling together a cabal of single-purpose solutions.  If they already own a competitive product, find out what they did before they bought that product.  As an example, someone like our Tim persona, before buying a purpose-built product, did the following:

  • Used The Sword and Laser podcast to discover new content and get recommendations.
  • Used Facebook to get and share suggestions with his friends, and have conversations about his favorite works.
  • Used wikipedia and artist individual websites to find other works by his favorite artists.
  • Subscribed by email to artists that published serials, blogs, other recurring content.
  • Purchased tangible copies of works from Amazon.com.
  • Borrowed tangible copies of works from IRL (in-real-life) friends.
  • Purchased ebooks in pdf, epub or other formats that could be read on his computer and phone.
  • Used Dropbox (or drag-and-drop by USB) to synchronize content across devices.

The problems that people are solving did not come into existence when the solutions were invented. The problems predate the solutions. [Note:if you have a Forrester subscription, check out Mary Gerush's Exploit the Requirements Lifecycle for a more detailed discussion].

The roll your own solution is a viable “competitor” for a B2C product.  In the B2B world, this is usually called best of breed. [Note: it is usually called this by one of the vendors of one of the pieces of the cobbled-together solution].  Using these amalgam-of-products solution strategies can make sense – and for some customers it will be the best solution.

We know that Christina and Time (two of our personas, defined earlier in the series) are different personas – they value different goals differently.  They will also use different approaches to create their own mix and match solutions to their problems.  Previously, I said that you didn’t have to interview people who represented your personas in order to identify competitors.  You do, however, need to figure out which product bundles represent the roll your own solution for each persona.  That is best done by interviewing representative customer prospects.

Our Example Competitors List

In this series, we are showing the mechanics of performing a product comparison, not sharing an actual analysis of the Kindle Fire.  As such, this is (again) where I get to manufacture illustrative data.  Here’s the list of competitive products that could have resulted from the research and analysis described above:

  1. The Kindle Fire
  2. The Nook Tablet
  3. The Kindle Touch
  4. The iPad 2
  5. A laptop running windows, with a pdf reader, the free kindle app, and an HTML 5-compliant web browser.

The list above is not exhaustive.  Like most analysis activities, you can go on forever, but with diminishing returns.  Where you draw the line is a matter of risk mitigation.  Add as many competitors as you feel you need to accurately assess how well your product (or a future version of your product) will compete in the market.  There is a risk associated with both too much analysis and too little analysis.

Too much analysis slows you down and is expensive.  You will get a comprehensive view, and minimize the risk of missing something, but you run the risk of taking too long.  You also run the risk of never stopping – you can never find all of the needles in the haystack – and therefore you run the risk of never shipping or shipping too late.

Too little analysis saves money and time, but you run the risk of delivering the wrong product.  If you happen to identify all of the competitors that have (or will have) success in the market, you’ll be sufficiently informed (because your view will be a super-set of your customers’ views).  If you overlook a product that is driving the market, you run the risk of watching the world go by through rose colored glasses – you’ll watch people buy that other product, and not understand why they aren’t buying yours.

Here’s where agile provides a perspective that lets you escape the catch-22.  If you do “too much” you can never recover.  The money you spent is a sunk cost.  The time you lost is gone.

If you do too little, you can always do more later, when you realize you need to, as long as your team is capable of embracing change.

Summary

To create a competitive product, you need to know how your product stacks up against the competition – and that means you need to know who the competition is.  A product marketing manager may take this information to emphasize strengths and “turn weaknesses into strengths.”  A product manager can use the insights from this analysis to paint an informed picture of what the product needs to be (and why).

Recapping the overall flow of this series of articles on product comparison

Getting useful information from comparing products requires you to:

  1. Introduction and Overview (so that the step-numbers align with the article numbers)
  2. Identify your customers.
  3. Articulate the problems your customers care about solving.
  4. Determine how important solving each problem is, relative to the other problems, for your customers.
  5. Characterize how important it is for you to solve the problems of each group of customers.
  6. Discover which (competitive) products your customers consider to be your competition. (This article)
  7. Assess how effectively each competitive product solves each important problem.
  8. Assess how effectively each competitive product solves each important problem, for each important group of customers.

With this information, you can create a point of view about how your product compares to other products.

Attributions

Thanks Matthiew Yglesias for the El Camino photo.

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This article was published on Wednesday, December 21st, 2011 at 10:08 am and is filed under Ishikawa Diagram, Product Management, Product Strategy.
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29 Trackbacks

  1. By LeanStartupNews on December 21, 2011 at 4:18 pm

    Comparing Products Part 6 – Know Your Competition http://t.co/HC09dERV

  2. By Roger L. Cauvin on December 21, 2011 at 4:21 pm

    RT @sehlhorst: Know Your Competitors http://t.co/7jgW24ng Comparing Products pt6 at Tyner Blain #prodmgmt #prodmktg

  3. By OneDesk on December 21, 2011 at 4:23 pm

    RT @sehlhorst: Know Your Competitors http://t.co/7jgW24ng Comparing Products pt6 at Tyner Blain #prodmgmt #prodmktg

  4. By Mark Lawler on December 21, 2011 at 4:25 pm

    Know Your Competitors http://t.co/CtKExxxb Comparing Products pt6 at Tyner Blain #prodmgmt #productmarketing

  5. By jidoctor on December 21, 2011 at 5:24 pm

    RT @sehlhorst: Know Your Competitors http://t.co/PcTcL7bY Comparing Products pt6 at Tyner Blain #prodmgmt #prodmktg

  6. By Giles Farrow on December 21, 2011 at 5:28 pm

    Competitor Research http://t.co/YeW7fXkN by @sehlhorst << A weak spot for many in #prodmgmt #prodmktg #startup

  7. By Alan Kleber on December 21, 2011 at 6:04 pm

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  8. By Gregory Yankelovich on December 21, 2011 at 7:43 pm

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  9. By Joshua Duncan on December 21, 2011 at 8:17 pm

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  10. By Alltop Agile on December 21, 2011 at 9:23 pm

    Tyner Blain – Scott Sehlhorst: Know Your Competition – Comparing Products Part 6 http://t.co/qYHY2IOc

  11. By Rich Mironov on December 21, 2011 at 9:56 pm

    @sehlhorst really knows his #$@% : Know Your Competitors http://t.co/XIbS7bjK Comparing Products pt6 #prodmgmt #agile

  12. By Joshua Duncan on December 21, 2011 at 9:59 pm

    @sehlhorst really knows his #$@% : Know Your Competitors http://t.co/XIbS7bjK Comparing Products pt6 #prodmgmt #agile

  13. By Scott Gilbert on December 22, 2011 at 3:31 am

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  14. By Greg Skafte on December 22, 2011 at 2:01 pm

    Know Your Competition – Comparing Products Part 6 http://t.co/8bSns2kc

  15. By Skip Cody on December 22, 2011 at 7:00 pm

    Great read! Know Your Competition – Comparing Products Part 6 http://t.co/purZFrkK #prodmgmt

  16. [...] Know Your Competition – Comparing Products Part 6 [...]

  17. By Jay Nathan on December 24, 2011 at 3:07 pm

    "The problems that people are solving did not come into existence when the solutions were invented." http://t.co/lz9xVWO3

  18. By Jay Nathan on December 24, 2011 at 3:08 pm

    "The problems that people are solving did not come into existence when the solutions were invented." http://t.co/lz9xVWO3” #prodmgmt

  19. By Andrej Ruckij on December 25, 2011 at 9:24 am

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  20. By MagiaDigital on December 27, 2011 at 1:45 am

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  21. By Nicholas Muldoon on January 10, 2012 at 11:51 pm

    Well you learn something new everyday, Ishikawa Diagrams to help define the problem a product is trying to solve: http://t.co/jdeKSA1j

  22. By Vinay Igure on January 11, 2012 at 8:13 pm

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  23. By Tomas Schmidt on January 12, 2012 at 2:28 am

    RT @sehlhorst: Know Your Competition – Comparing Products Part 6 http://t.co/Jmn01PkB #prodmgmt #marketing

  24. By Val Workman on January 12, 2012 at 2:30 am

    Thanks for the point RT @spotr: RT @sehlhorst: Know Your Competition – Comparing Products Part 6 http://t.co/cjECaBS7

  25. By Martin Seibert on February 7, 2012 at 8:17 am

    Um wettbewerbsfähige Produkte zu entwickeln, muss man die Produkte der Konkurrenz gut kennen: http://t.co/4qJU7pQ2

  26. By //SEIBERT/MEDIA GmbH on February 7, 2012 at 8:17 am

    Um wettbewerbsfähige Produkte zu entwickeln, muss man die Produkte der Konkurrenz gut kennen: http://t.co/TzBmGqRh

  27. By Sani Elfishawy on April 23, 2012 at 7:18 pm

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  28. By UX Factory on June 22, 2012 at 2:23 am

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  29. By UX Feeder on June 22, 2012 at 2:23 am

    Delicious: Know Your Competition – Comparing Products Part 6: http://t.co/7exgHR8c [UX popular]

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