You have this awesome idea for a new product. You start dreaming about how great it can be. You have it all planned out in your head.
You sit down, type your idea into Google, and then the bad news comes. Competition. Lots of it. It sucks.
But actually... And it may sound counterintuitive... Building a product in a competitive market is a great idea, especially for first time founders.
When you build a product in a competitive market, you know there is a need. Millions if not Billions are actively searching for a solution. They already know they need software to solve their problem.
My previous SaaS product helped freelancers to take care of their taxes. We had 5-10 direct competitors, and yet we managed to win a significant market share. Here is what I learned.
You have to be better at just one thing. Understanding this one thing is the challenge. We had to get to know our customers well. Really well. Only then that pain started appearing above the surface. Later this became our differentiator.
While you are getting to know your customers deeper and deeper, here are 3 common ways your product can differentiate in a competitive market:
Focus on a specific group of users
Shopify is the most popular tool to build an online store. You can use Shopify for any kind of online store.
Gumroad started by focusing on one specific type of customers: Digital creators. If you want to sell an ebook, icon set, or a website template, Gumroad is for you. You can also sell it on shopify, but it will be 10 times more work.
By focusing on a specific set of users, Gumroad was able to dramatically simplify the process of building an online store for digital creators, and became the go-to solution for these types of customers.
Focus on users with less domain knowledge
To change the design on Wordpress, you would need to make changes to the "theme" code on Wordpress, which requires knowledge of HTML, CSS and PHP.
Webflow started by enabling users to make changes to their landing pages without any coding knowledge. They also provided step by step videos on how to do it. Now (almost) everyone can design their landing page with Webflow.
Focus on smaller businesses
Intercom is a great product for communicating with customers. Most of the people that use it, love it. Including myself.
Yet Intercom has plenty of successful competitors. Intercom gets very expensive pretty quickly. Enterprise customers can afford it. Solo founders or small startups usually can't.
Crisp thrives by focusing on solo founders and small startups. There tagline is "#1 Messaging Platform For Startups & SMB's". Their most expensive plan is 95$ per month. Intercom can cost 10-100 times more.
I would be curious to hear how you differentiate your product in a competitive market. Feel free to start a conversation on Twitter @nirshub.