Competition in SaaS

We’re not competitor obsessed, we’re customer obsessed. We start with the customer and we work backwards - Jeff Bezos, CEO of Amazon

This is the kind of quote you see on Linkedin or Instagram and gets you all pumped!

"Damn right it's all about the customer", you say.

Then after a few weeks have passed, you forget about this quote and you're back to obsessing over your competitors.

Why people obsess over competitors?

Stealing from competitors feels good!

I'm not gonna lie, I've done it before and will probably keep doing it in the future to some extent. And I can assure you that my competitors have stolen from us!

I get it. It feels like a cheat code. All the hard thinking a team of people has done, you can just copy and feel smart about it.

After all, if they do it, it must be working

But soon enough, your competitors become front and center in everything you do.

  • Designing a new price page? Let's look at how Competitor A is priced first.
  • Writing copy for a new website? Let's first read Competitor B's new website.
  • Building a new feature? Let's test how Competitor C does it.

When you go down that this road, it's bad. Not because of ethical or righteous reasons, but because you're missing a huge part of the picture.

How to stop obsessing over competitors?

The end goal of any competitive analysis is to help you understand the market.

We recently hire a new marketing manager whose first job was to revamp our website. I wanted the website copy to better resonate with the struggles our customers face each day, but I didn't want her to rely on too much on competition analysis to figure this one out.

After all, competitors are only a proxy for what the market wants. And while it's easy and attractive to steal, you're still acting on the choices, assumptions and tradeoffs made by your competitors.

What if they are wrong? What is we know something they don't?

So I figured the best way for her to grasp the subtleties of our market was to actually talk to our customers. We reached out to 150 of our best customers and asked them to pick their brains. We wanted to understand how they thought of us, and how they perceived our competitors.

The answers blew me away.

While I did expect competition to be of lesser importance to customers than it was to us, the scale is what surprised me. More than 80% of the customers we interviewed either didn't care, or weren't even aware of our competitors.

We kept hearing things like

  • "When I stumbled upon, I never thought a tool like that could exist"
  • "We used to track client feedback in a spreadsheet. I can't imagine going back"
  • "Before your tool, my process for reporting a bug was very manual.

These are your real competitors.

These conversations reminded me of taught me 2 things:

  • In the SaaS business, you compete against tools like docs, spreadsheets, screenshots, emails and meetings way more than you do with direct competitors.
  • Positioning happens inside your customer's mind. You can influence it, but it's not something you own. Just because you "own" the copy on your website does not mean you "own" how customers think about you.

For some reason this is too easy to forget. The best way to get reminded of this is to talk to your customers.

So, should I care about my competitors?

I think you should care 🙈

First, context matters. For most SaaS business, customers can't connect their problems to specific types of tools on their own. However if you're in a well established category with clear needs, competition might play a bigger role.

For example, let's say you sell a CRM. Most growing companies will identify at some point that need a better way to reach out and track interactions with their customers. In most cases, it will be pretty clear that what they need is a CRM. Buyers will then compare your CRMs with others in the market and you will need to know your competitors' offerings inside and out.

Second, competition analysis is still a valuable tool. Obviously you don't want to base your strategy around your competitors, but it is still a useful tool. As with most things in business, nothing is black and white.  It's not about wether you should or should not look at competition (although it makes for a better instagram quote 😅), but it's about how much you should look at them. Do you look at them every week? Or a couple of time a year?


You competitors can teach you things about your market. Your team can give you insights about your market.

But remember to actually ask your market.

Speak with you customers.

Don't just answer their questions. Ask them your own questions.

You might discover that your competitors are not as important as you might have thought.

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