Alternatives, Not Competitors

A common question I get from people interviewing to join Reforge, is “who are your competitors?” My answer - you are asking the wrong question.

You should rarely think about competitors, because competitors (by your definition) are rarely who you are truly competing with. Most products are competing with alternatives. Alternatives are the other ways your target audience are solving the problem today.

Examples of Alternatives, Not Competitors

• Slack was not going up against Hipchat, Flowdock, and the many chat products that came before them. The primary alternative for their use case was email.

• Pinterest was not going up against iHeartThis and other early clones of Pinterest. The primary alternative for their users was cutting/pasting pics out magazines or copying/pasting digital images into document files.

• DocuSign did not compete against HelloSign and other e-signature companies. The primary alternative for their customers were pen-and-ink signatures and FedEx-ing documents.

If you focus on competitors, you are likely to make three critical mistakes:

1. You Will Lack Differentiation - When competitors look at each other, they will gravitate towards the same features, the same messaging, even the same design.

2. You Will Play Too Small of a Game - Alternatives typically have 10X to 1000X the usage of competitors. It is a much bigger ocean to fish in.

3. You Won't Understand Real Psychology Of Your Users - Most of your audience has a habit built around the alternative with very specific actions, workflows, and motivations. You need to build against those things to break the habit with the alternative and establish it with your product.

Defining Your Alternatives

So how do you find your alternatives? You should be doing three things:

1. Ask your existing customers, what problem does the product solve for them? Get it in their own words.

2. Then, go to non-customers in your target audience. Ask them "When was the last time you had this problem? Walk me through step by step how you solved the problem."

3. Then ask yourself, how do you provide a 10X experience to those alternatives.

It’s possible in step #2 that your competitors come up. More often than not, they are not the most popular answer. If they are the most popular answer, you are likely competing in a red ocean. I love thinking about strategy. We go a lot deeper on it in Advanced Growth Strategy, Product Strategy, and Marketing Strategy programs in Reforge.