First, there is no product or service that doesn't have competition. And if you tell someone that your product has no competition, what they hear is that there isn't a big market for your product–which isn't good.
Having clarified that, let’s look at the two big categories of competition.
On one hand, you have direct competition for your business—this is mainly other companies that are making the same promises that you are making. Lot of factors about the competitor (such as size of the company, pricing of their offerings, brand and image, etc.) will influence how much they will affect your business.
On the other hand, you have indirect competition. As the name indicates, this kind of competition is easy to miss.
Here are five of them to consider:
1. There is no “real” need now
This is a mindshare competition. This happens when you create products that are “solutions waiting for problems.” There is a big “lean startup” movement going on (at least in Silicon Valley) where products are co-developed with customers. Most often, that’s not the case—someone develops a product because they see a need for it and assume everyone has that same need. If you have a solution that is looking for a problem, you need to go back to the drawing board.
2. There are mediocre but less expensive alternatives
Whether you like it or not, if there are less expensive alternatives to what you are offering, there will be a large majority of people who will opt for it. Quality and standards are relative and varies based on taste. What one thinks as mediocre may be perfectly acceptable to someone else.
3. There are “minimal” alternatives
Your gizmo may do everything from video chat to bringing your newspaper in the morning. You may also be adding new features every other month. The point is that not everybody wants all your features. 37Signals built a huge business building products with no-frills. Eighty percent of the people out there can get by using a product with minimal features and 80 percent is a large enough market to focus on.
4. People generally maintain “status quo”
This is the hardest one to recognize and digest. Before your product or service came into the market, life was going on and life can go on without people having to use your product. In general, status quo will be maintained only because the alternate option is “to change,” which is not easy to come by.
As you design products, think of incentives that you can provide for people to embrace your product. It is harder than you think.
5. New ways of serving “needs” emerge
You may remember products like Sony Walkman, Floppy Disks and VHS Tapes. During their times, those products were popular and served the needs of people. Things changed and new products that changed the game emerged. With these new products, the way the needs were served changed—be it more capacity, more convenience, speed or new capabilities. Once that happened, the old products became obsolete and entered the end of their product life cycles.
Image credit: jo-h