45. Founders, your competition might not be what you think it is

I want to talk about a different way of thinking about your competitive environment. It's been resonating with a lot of the people I advise.

I talk with a lot of founders about their competitive environment. Usually, that starts in the context of helping them with their deck. They're often in the process of putting together that all-important competition slide, which shows how they stack up against the other companies in their space. Inevitably, it shows that they're superior and puts them in the upper right quadrant or gives them all the little checkmarks down the grid. But one thought that occurred to me during these discussions was that your competition isn't just the other companies in your space.

Fundamentally, your competition is absolutely everything else in the world with which your customer might need to engage. Although you might be better than their existing solution, they still might not choose to buy your product. So often, I see companies where the competition is Microsoft Excel. They've created a solution targeted at some particular vertical that is far better at solving this problem than Excel, so they think: "well, of course, people are going to want to switch to us. We're going to save them money. We're going to save them time we're going to provide whatever benefits we've got." And those are all true statements. But the problem is, will the customer engage? Just because you're better doesn't mean they're going to buy.

Why won't they buy? In many cases, it's because they have too many other priorities. A company or the purchasing manager only has so many hours in the day. They have a limited budget to start these things. They only have a few people free to work on new projects and finite mental energy to even think through these issues. It's not just a matter of being better than what they're doing. It's a matter of being able to rise above that level of noise and get on the priority stack at all. Of the thousands of things this person could potentially do, they will only act on maybe 10. How do you get to be one of those 10? That is why any other thing they could spend time attention money on is a competitor to you.

When you're thinking about the question "how much do people want my product?" it's not enough to say it will save them money or produce some sort of beneficial outcome. You need to show that this is a big enough problem for your customers to put it at the top of their priority stack. People talk about a solution needing to be much better than the alternatives and addressing a substantial need. It's not because what you're doing isn't better. But if it's not a whole lot better, it will not lose to your direct competition, but rather to the fog of war that's going on all the time and all the other things people need to do.

I'm encouraging the people I advise, and I'm encouraging you, to spend a lot of time talking to potential customers. Understand the problem set, understand what other priorities they're dealing with. Make sure before you invest time and treasure into your own business that you meet the threshold where people will put you above the set of priorities that they were previously considering.

I would appreciate your feedback on this shorter and more casual blog/episode format. Please leave a comment down below to let me know whether you like these shorter episodes or whether you'd like me to stick with longer, more formal episodes that I've been doing in the past.

Until next time ... Ciao!