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What do you do when there is a lot of competition in your space?

We are building a SAAS solution for a problem that already has a lot of players. The market is huge and there is a lot of potential. I have a better price and product but there is nothing extremely different than what is offered by some of these softwares. I have read that having competition is good because there is a market need.

41 Replies

Cameron Ackbury
4
2
Cameron Ackbury Advisor
President US Operations | Investor | Seeking top tier University entry level Sales, Marketing, PR Candidates
There is an old adage: a person never loses their job buying from Microsoft. The same applies here - if you can't distinguish yourself and provide better value then you should worry.
Alistair Davidson
4
0
Eclicktick Consulting
I think you should worry. Research on innovation suggests that the single largest predictor of new product success is offering a differentiated high value product. The biggest prediction of failure is inadequate understanding of the market, which implies a lack of understanding of user needs and values sought.

I have a book on the subject available on Amazon Kindle. You might want to read it.

Alistair Davidson
Gabor Nagy
2
4
Gabor Nagy Entrepreneur
Founder / Chief architect at Skyline Robotics
That adage was "buying from IBM".
;)
And anyone working for me, would lose their job, for buying from Microsoft.
I have a "no Microsoft on the local network" policy (mostly due to security concerns).


Bill Lennan
3
0
Bill Lennan Entrepreneur • Advisor
Red Rope Social
Maybe you should worry - and maybe not.
How well do your competition sell their product? How's the marketing?
Even if they have a better product, if the marketing and sales are negligent, you have all kinds of opportunity.
Scott Hogrefe
1
0
Scott Hogrefe Advisor
Vice President, Marketing at Netskope
Agree with previous posts -- you should worry. Being late and lacking differentiation puts you at a huge disadvantage.
Mike Moran
7
0
Mike Moran Advisor
Senior Strategist at Converseon
Lower price is a very tough way to stand out. Anyone can undercut you at any moment. You need to find differentiation, which is more than just being different from the competition. Differentiation means being different in a way that a particular market will pay for. They need to be willing to pay more for your product than the others because your product solves their problem better then the others.

This doesn't mean, necessarily, that your product is better than the competition. It means that a particular group of customers that your product is demonstrably better. It might be worse for most customers.

This has always been important, but never more so than now. The Internet makes much more information available to prospective customers than ever before, so if you can't make a strong appeal to at least some of the market, it is very tough sledding.

Yes, I would be worried.
Neil Chalk
3
0
Neil Chalk Entrepreneur
Product Manager
Couple of questions spring to mind:
  1. Your potential competitors - are their customers happy with the service? or are they regarded as poorly as a cable company?
  2. You mentioned that you have a better price, how much do you know about how your total unit cost compares to their variable cost? Could they start to price way to prevent you getting established?
  3. How much of your addressable market is already being serviced by the competition? 25%? 50%? 90%?
  4. Is the market a commodity market? If not then price might not be enough of a differentiator for a new entrant.

Hasnain Millwala
2
0
Hasnain Millwala Entrepreneur
Helping businesses get more productive in their supply chain by unleashing the power of integrated information on demand
I think it depends on what you are trying to achieve with this business. There are millions of businesses in the world and honestly very few are like really innovative or different per say. Nonetheless people run normal businesses as well that may not count as innovative or breakthrough but are enough to make a decent living and really run a business. If the market is big enough it will accommodate the players. In fact if there are already so many players I'm sure your research shows that not all of them are drastically different from each other. I bet many of them have common features. Find that one value add that one feature or pillar that u can sell on. And in fact it doesn't have to be just features. Price and market positioning also count as distinguishing features. If u can find one such feature and market is big enough. Your business will sustain. Might not be the one to scale to billions or more or be a unicorn but it can surely be a business
David Pariseau
6
0
David Pariseau Entrepreneur
CTO and CoFounder at Particles Plus
I'm sure it's disappointing to find that you underestimated the competition (sobering I'm sure, since you'd hope to approach a venture by having a very good understanding of the market). So, what now. One asset you might have is that as a smaller concern you can perhaps focus and address a market niche in your space that is less attractive or less well served by your competitors. See if you can't identify a market segment with specific needs that are not being addressed specifically and see if you can't make your firm a specialist in that field and direct your limited resources at providing a solution to that market. That will give you a method to differentiate yourself from existing solutions and keep you from having to meet your competition head-on with a me-too product.
Peter Geisheker
3
0
Peter Geisheker Entrepreneur
Digital Marketing Director - B2B Marketing - SaaS Marketing - Seeking a Digital Marketing Position
I am currently providing marketing services to three different B2B SaaS companies and a market that has a lot of competition shows me that it has the potential to be a lucrative market.

To be successful in your niche market you need to show (prove) why your SaaS is different and better than your competitors (your USP), and your USP needs to be something the market wants very much.

Going after the market position that you are the lowest priced solution is rarely a good position to take as there will always be someone who comes along who will charge less. I recommend that you interview at least 20 potential customers to see what their pain points are and how you can best solve their problem(s). Be the best solution to their pain point instead of being the lowest cost solution. You will find that people are willing to pay a premium for the best solution to a problem compared to the cheapest solution. And, often, the people/businesses who want the cheapest solution are not the companies you want as clients.

Another thing I would do for research is use a tool like SEMRush to see how many searches are being done for the problem you solve. If tens of thousands or hundreds of thousands of people are searching Google each month for a solution to the problem your SaaS solves, that shows you there is strong market potential. However, if only a couple thousand or less people are searching each month for a solution to the problem you solve, that tells me it may not be a big enough market.

If you need marketing help contact me. I have extensive experience marketing B2B SaaS.

Peter Geisheker
(920) 318-0654
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