Product Development March 28, 2020

How to stand out in a competitive market (and why you should be in one!)

Kevin Conti @Kevcon80

Have you ever seen any of those “house hunter” shows?

I’ve been obsessed with Caribbean Life recently, while I’m stuck inside due to the coronavirus. While, admittedly, watching these shows is a waste of time, if you look closely you can also learn a ton about how to stand out in a competitive market.

Why you should be in a competitive market

First of all, I recommend that you go into a market that has pull. I talked about why in my last IH post, which seems to have connected with a lot of people. But the reality is, markets with pull are going to have competition. Wouldn’t it be better to make a product that is brand new, that customers didn’t even know could exist?

Not at all. You want your potential customers to know they have a problem, or perhaps even know what a solution looks like. Otherwise you’ll need to spend massive amounts of energy convincing them that they have a problem, and selling why your solution solves it.

This brings us back to housing.

The Housing Market

The housing market is clearly competitive. There are millions of competitors, looking to offer the same product (living space) to potential homeowners. However, real estate is still treated as a pretty reliable investment. Why is that?

First of all, it has massive pull. Everyone needs a place to live. Even if we narrow down the housing market to home buyers, there is still a constant demand for the product of a house.

Imagine if your product had as many competitors. How would it stand out?

In the house hunting show I’ve been watching, the realtor starts with the basics, like the number of bedrooms they need. Then, the realtor helps the client move through the market by figuring out what they really care about most in a house. This tends to fall down to one or two things. For example,

  • A great master bedroom
  • It needs to have a pool
  • A big enough kitchen for cooking
  • An open kitchen that looks over the family room

Etc, etc. there are literally hundreds of these features that may be important in a house, but any given family will care most about only a few.

Back to business

In your business, you want to be in a market where people know they want a product like this, like the housing market. To stand out, you need to figure out what are things some people will care about, and make those your main selling points. That positioning will be the reason people will buy your product over one that is far more established, feature rich, and frankly better.

But if you can position to a segment of users, then to them your product will be the clear winner.

  1. 3

    What you said that really resonated is that we should always focus on markets that know they have a problem and they're convinced your product category is the solution for it. I've worked for startups where they had to educate the market because the market doesn't know they have a problem. They've always been uphill struggles.

    Hell, just because they know they have a problem doesn't mean they're convinced that your product category (your type of software) is the solution for it. Plenty of such markets exist. I've also worked with markets where you had to come up with 10 case studies with clear demonstrable ROI before they're even convinced enough to book a Zoom demo with you.

    The best markets are the ones where people clearly know they have a problem and that your product category is the #1 or only solution for it (or like you said, "pull"), which eliminates the need to 1) educate them on the problem and 2) convince them that your product category is the solution. You only need to 3) convince them that your specific product is better than your competitor's.

    To stand out, you need to figure out what are things some people will care about, and make those your main selling points.

    then to them your product will be the clear winner.

    The key part to me is "to them." Because it doesn't matter if 99% of the larger market doesn't think you're the leading solution. If only 1% thinks of you/your product as a God/gift from heaven, you win. It's the concept of cult of personality but applied to founders/products.

    And until now I'm still unconvinced that it's going to be product features, UI/UX, or even the product itself that serves as an effective differentiator. It's going to be a combination of a loyal audience supportive of your journey (which is very hard to copy) + a positioning that just nails it and nails it so well on a subconscious/emotional level that anyone else that comes after you and adopts the same positioning will just create confusion and look like a weak substandard copycat.

    Great post, as usual. 👍

    1. 1

      Glad you liked it!

      And until now I'm still unconvinced that it's going to be product features, UI/UX, or even the product itself that serves as an effective differentiator. It's going to be a combination of a loyal audience supportive of your journey (which is very hard to copy) + a positioning that just nails it and nails it so well on a subconscious/emotional level that anyone else that comes after you and adopts the same positioning will just create confusion and look like a weak substandard copycat.

      Have you read April Dunford's positioning book, Obviously Awesome? I'm heavily inspired by it, and when I mean positioning I definitely am referring to something very close to how she defines it.

      In my mind, positioning is the viewing angle of a product. It's the way that a set of features are represented. So, while I hear you when you say that it's not about features, I think in a sense it very much is. It's about the perfect positioning for an audience that really cares about a few things that your competitors don't emphasize as much as you do.

      So, I'm in agreement with the statement above, with the caveat that I think features do still matter, just that they are what leads you to your positioning, and are a result of that ongoing positioning exercise.

  2. 1

    How do you research a market to determine high value usp's?

    1. 1

      Hey Caine, I answer this at the top of the free post: https://www.indiehackers.com/post/looking-for-a-business-idea-heres-three-more-companies-ready-for-disruption-68c02c028d

      It basically involves looking at a market, figuring out what the big players have done right, then looking at what groups/niches don't feel completely satisfied with the major offerings but those companies won't or can't help them due to being focused on the general market.

  3. 1

    A big one you missed with property is location; near good schools, nice parks, shops, etc.

    I think the online equivalent would be a community.

    1. 2

      I think I do cover this:

      Etc, etc. there are literally hundreds of these features that may be important in a house, but any given family will care most about only a few

      The location is another thing that people want in a house, but it's just another item on their checklist.

      Thanks for reading!

  4. 1

    Excellent blog post! I never thought about it that way, but it makes a lot of sense. It's a lot easier to sell a solution to a problem the customer knows it has, then selling a solution to a problem they didn't know they had.

    1. 2

      Thanks! I reached out to Arvid Kahl on twitter yesterday, and he had a slightly different way of phrasing it:

      problem-unaware customers don't know how they have a problem
      problem-aware customers know that they have a problem, but aren't sure what the solution would look like
      solution-aware customers know the problem and are versed in some of the options, perhaps even having tried a home-brewed solution (such as excel or word, if it makes sense to for that product)

      The most prolific customers were also the most aware. They had the most tedious levels of the problem that we solved. So they were much more likely to look for a solution, paid or not.

      • Arvid Kahl
  5. 1

    "But if you can position to a segment of users, then to them your product will be the clear winner."

    • The question is how will one know that ? :)
    1. 1

      Are you asking how to position, or specifically how to know if your positioning is successful?

      1. 1

        Yes.

        1. 1

          Step one, read Obviously Awesome by April Dunford. It's around 100 pages, and far-and-away the best resource for learning what positioning is and how to do it.

          I also wrote a post recently about how the housing market gives a really good example of how to position for a segment of users. I'd recommend that to get an idea of positioning.

          Lastly, you'll know your positioning is successful when you don't need to 'sell' your product to your customers, and instead you're just letting them know it exists.