I about almost lost my lunch today.
My big lesson in this article is don’t let SaaS competition ruin your sushi lunch run.
Breath. It’s going to be ok.
It’s funny now, as I think about it. But it wasn’t funny 6 hours ago.
I literally didn’t eat lunch and immediately thought I needed to skip lunch to save money.
I didn’t have an appetite now anyways.
But I had nightmares running through my head of having to sell the company. Visions of me homeless on the street.
The trained entrepreneur in me was losing the fight to the irrational doomsday “prepper” and I was losing fast.
It wasn’t until I spoke with Jeff and our angel investor and really broke down the value proposition of this new application that I was able to calm the fuck down.
Breaking down your SaaS competition
The first thing we did as a group is go over what our value proposition was to the market. And after that we broke down what the competition’s was. This was a fucking great exercise and I felt like a war general afterwards.
Much like a war scout returning to his tribe to alert them of how many of the enemy was approaching and what weapons they may have…you can’t help but be rattled.
But then you gather your war cabinet and you get down to business. You spread out the map on the table and you start plotting your counter actions.
In our case, we started by reminding ourselves of the value we brought to the market. Almost like an ego boost. it was very, very helpful.
We came up with a few attributes and advantages right away:
- We’re the fastest Amazon listing application on the market
- We had a middle-of-the-market pricing tier and offered the best value
- We had a Silicon Valley developer who’s young and ambitious
- We had little overhead
- We had a community
And then we came up with what thought were their disadvantages:
- They were brand new and had ZERO market share
- There are enough customers to go around anyways
- They had to pay out of pocket for their entire development
- They wont be using affiliates to help drive growth
- They are trying to do too much all at once with features
After taking deep breaths, a couple of virtual high fives and some locker room chants…we all felt a lot better.
Competition keeps you sharp
Once the more rational leader in me emerged from his shell and realized their wasn’t much to be afraid of, a remarkable thing happened.
As if I just popped an Adderall, I became extremely focused.
I started thinking about all the things I pushed off that week in marketing and operations.
I got mad. I got disappointed in myself.
I got inspired. I wanted to skip dinner and bang out a bunch of tasks I needed to do for our company.
But that too was a mistake. Yet again, I needed a few minutes to think this through.
You see, rushing to action in response to a new competitor and trying to shore up tasks you forgot to do will only get you short term gains.
You already needed a plan to work and you need to work it as planned! Ha!
You still need to react to your competition. We’re not saying ignore them. But knee jerk reactions are no good. They don’t fit into your plan.
Steady Eddy wins the race. The more distracted you are the less focused you are. The less focused you are the more you deviate from plans made when you were definitely more rational.
The more they’re focused on following you, the less they’re focused on building their own moat, but don’t get cocky.
Keep your head down and build your moat
Every good business built to last usually has some sort of moat they have built.
That can be a technical moat, a speed-to-market moat or some other advantage you’ve crafted to keep enemies from advancing on your position.
Instead of scrambling your local mage or castle scientist to build more features, you should directing your soldiers to build that moat faster and deeper around your castle.
For us, that meant shoring up some of our existing features and continuing to release new features at our normal pace and continue to build our community.
Yes, you need a community.
In a SaaS laden, cloud rich world…you need to always be building a community around your products.
Communities are one of the best moats around in my humble opinion. They act as emotional barriers that are hard to be penetrated by your competition.
That’s why Nathan Barry totally disrupted his business and created a conference to start building his moat. ConvertKit didn’t need to do this but they were forward thinking enough to know they should be doing it.
Because they we’re in a very crowded space. The email service provider niche is probably one of the most crowded spaces to be in besides CRM software.
But from early reviews, it seems like ConvertKit nailed it.
They moved one step forward in front of their competition by winning the hearts and minds of their base with an endearing and value added conference.
It’s also one hell of a marketing play.
Just slap me would ya?
Looking back yesterday on my irrational exuberance, I am almost embarrassed to call my self a leader. I feel like I failed my team and my army. Had I been a general or platoon commander in a real military there could have been real consequences.
Good thing for me and others, I’m still just an entrepreneur in Los Angeles.