Product Development March 23, 2020

How do you differentiate yourself from the competition?

Jon Blankenship @Jon99

As someone who's recently launched a product into a market with competition, I've been thinking a lot about how I differentiate my fledgling SaaS from the established competitors. I wrote my thoughts on the topic here.

Launching into a crowded market without differentiation is a losing game. As a founder you need to have a clear idea of how you're different from your competitors and understand why potential customers will choose you over a more mature, feature-rich, better-known product from your competitor.

So I'm curious: If you're a founder who's launched into competition, how have you differentiated yourself from your competition?

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    Today I strongly believe that experience is the key. Except for products with high-barrier to entry, all products are quite similar. Of course you can't come up with all the fancy features of your competitors. Focus on the 20% bringing 80%, add a layer of great UI/UX, some storytelling and a dose of brand personality. You have a kickass product.
    Branding is too often undervalued by startups.

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    My product Snap Search is part of an extremely saturated market - Mobile Browsers. Mine aims to be a truly unique privacy based browser with it's main focus being on searching the web without getting tracked. I've always tried to maintain certain principles and 'rules' keeping it unique:

    • No permissions required ever
    • No account creation ever
    • No ads ever

    None of the existing browsers can boast of all the above. Even browsers like Brave ask for your location at minimum. We don't do/need/want anything.

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      A bit off topic here, but I am curious. If you don't track users, then how do you know that they have made "50,000+ Private Searches Completed" as claimed on the website?

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        Not @cybersky, but you wouldn't need user data to keep track of how many searches your app service has performed, right?

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          Thanks for taking that for me 🙌🏼

          @petr17102018, like said above - I do not need any user data for this. I'm simply maintaining a count.

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      This is great! Having a distinct mission, an ethical code is something that can't be simply copied. It has to come from the people. Basecamp is a famous example.

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        Thank you! Yes that is very true.

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      This is a strategy that resonates with people these days - having an ethical "code" that the product is built around, which in your case is putting the user's privacy above all else. Fathom Analytics is an example of a product that has been very successful with this strategy.

      Best wishes!

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        Yes I've read about them and lots more. Very inspirational.

        And in todays time very important too.

        And thank you 🙂

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    Niche down to a specific segment and built the product around that. That's the biggest differentiation you can make. Of course, you need to have features designed for that segment as well, not just positioning if you really want to succeed.

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    I agree with @volkandkaya – focusing on a smaller, specific niche helps. As your product is smaller (in terms of features) in the beginning, it's also easier to decide what to build next. Just talk to your (potential) customers, ask a lot of questions to really understand their problem.

    A crowded market may seem like many companies doing the same thing. But if you look at their journey, you'll see a pattern. They start a little bit better in serving a specific audience, then expand further as they grow. This, in turn, makes them a little bit worse in serving that audience. That's where you come in. It's a natural cycle.

    When I started FeedBear, I didn't know this and struggled a lot with this problem. I'm learning as I go and I'm currently working on a new landing page and pricing focused on a niche audience.

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    For https://versoly.com/ we have focused on the SaaS niche, we should probably niche even further and go for early stage SaaS companies.

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      Congrats on your launch and your #3 on PH! I'd say keep doing what you're doing if it's working. If not, niche-ing down could be an effective strategy. Best wishes!

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    I'm going to put forth something a little contrarian: you can't differentiate on better features, UI/UX, or even customer support these days. Most software are actually pretty good in 2020 -- this isn't 2000 or even 2010 where there's some huge lumbering incumbent who is slow to adapt dominating the market. Everyone and their mothers are a bootstrapped nimble startup these days run by founders smarter than you.

    In other words, in 99% of niches there's commoditization; you can compete to some extent on price/positioning, but ultimately it's not really about the software itself. Of course it has to be good enough to meet the minimum quality threshold. But beyond that, better doesn't bring in more sales.

    What brings in sales?

    Relationships. A loyal audience. The illusion/image of success: buzz, hype, social proof. People wanting to support your journey not necessarily because they like your product, but because they like you. Or they see other people liking you, wonder what the hype is all about, and then ultimately hop on the bandwagon themselves to feel accepted.

    At the end of the day, it doesn't really matter what your customers think of your product.

    It matters more what your customers think other customers think of your product.

    This is why, despite the unscalable nature of my marketing, I find direct marketing, i.e. one-on-one conversations, to be most effective for Zlappo at this stage. If you're small and unknown, you have no magnetic brand or huge marketing budget to fall back on. All you have is your word, your authenticity, your human decency to convince people to trust and support you enough in what you're doing to vote for you with their wallets.

    I never found features to be an effective product differentiator. What I've found to be a differentiator is an audience loyal and supportive of your venture, who're not only willing to buy your product as a vote of confidence but also promote it to their audience on their own accord. And it spreads from there.

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      Interesting take. I agree that having a loyal audience of customers that love your product and are willing to tell others about it, give testimonials, and create buzz can be a tremendous advantage and a key differentiator. Many founders would love to have this advantage, one that I don't think can be overstated.

      But I wouldn't go so far as to say that you can't differentiate on features or UI/UX, for example. Sure, there may be competitors with great software in your niche, but software is never "done." Products developed in 2010 on 2010 technology and according to the preferences and sensibilities of the 2010 user will feel dated to the 2020 user. (Granted, for some products feeling old is one of their differentiators - Craigslist comes to mind. But these are the exception.) If a company is resting on their laurels and failing to continue to innovate, there's an opportunity for a newcomer who is innovating to come in and steal some of the market.

      Further, some established companies prefer to server a larger market and can't or won't cater specifically to a smaller niche within their market. Here's another opportunity for a small newcomer to come in and offer features that are tailored to the smaller niche user. This can be a very strong selling point to potential users in the smaller niche. They identify with you because you're serving them specifically.

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      Great thoughts. I specifically like "Out simplify them." Many MVPs are simple in comparison to the competitors by virtue of what an MVP is. Many users prefer simple over complicated. Embrace this.