Thinking about competitors

Hey there!

Let me be vulnerable for a sec.

I spent a lot of last year working on my own FinTech startup, and it was disrupted... by a potential competitor we didn't even see coming.

I was in shock.

I built a massive spreadsheet with every possible competitor I could find, and the one that took us down wasn't even on the list.

So today I'm going to share all the types of competitors so you don't make the same mistake I did.

Let's get into it:

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So what really is a competitor?

First, what's a competitor?

A competitor is anything that your customer can use instead of you. Think of it as an alternative solution.

Let's take Zoom as an example:

You can hop on a Zoom call or you can join a Google Meet. Sure.

But you can also take a phone call, shoot a text, or even meet in person. Those are competitors too.

Everyone thinks about the most obvious competitors: "the direct competitor."

Examples:

• Zoom vs Google Meet

• Apple vs Samsung

• Slack vs Teams

But there's two types of competitors that people tend to forget (including the one that took down my business).

Here's the breakdown:

The three types of competitors who want to steal your customers

So we have:

• Direct Competitors

• Indirect Competitors

• Potential Competitors (sore subject for me...)

Direct CompetitorsThese competitors sell the same product as you to the same customers. They're the ones everyone thinks about, and defends against.

Think: Zoom vs Google Meet.

We all know this one so let's move on.

Indirect CompetitorsThese competitors sell different solutions to the same customers (for the same problem).

Think: if customers need to communicate with their teams, they can use Zoom or... they can also communicate with a phone call, text, or email.

Many people who would rather make a phone call, could have used Zoom instead.

Potential CompetitorsThese competitors sell the same product, but to a different customer group.

Maybe they're targeting a different geography or a different customer type (value vs low-cost).

These guys aren't stealing customers today, but they could expand into your market.

In my case, my FinTech was advising small to lower middle market business owners, and the competitor was providing different services to startups. They expanded by providing our same solution to our same customer segment and we were blindsided.

Think: If Zoom is targeting conference calls and FaceTime is focused on 1-on-1 personal communication, FaceTime could make conferencing easy and become a Zoom competitor.

So how do you avoid what I did?

Start by listing out your competitors with the goal of making it clear to prospects how you're better than all their options.

I made this easy for you by building you a simple template (get it here for free):

My mistake was to focus on the first column, make sure you fill out all three.

Once you have your list of competitors, you can message to your customers how you're a better solution than all their alternatives.

Zoom does this by focusing their messaging on what their alternatives can't provide:

One place to get groups together to visually share ideas.

Check out their messaging:

Great!

That should be enough to help you avoid my mistake and don't get blindsided by a competitor.

Hope it's been helpful!

If you enjoyed it, please forward this email to friends looking to grow their business.

See ya next week,

Brian