This is a simple framework that allows product-driven teams to assess their competitive position compared to other companies and identify focus areas for product development.
You’ll be filling in a simple statement: ‘Compared to __COMPETITOR__ (who we consider to be __A__), we are __B__ when it comes to our ability to __CAPABILITY__. We must __C__.’ In that statement:
A is a type of competitor (Legacy Player — someone you’re trying to disrupt, Current Competitor — you’re actively competing with them, Established Future Competitor — an established company that may choose to pivot into your business, Potential Disruptor — an upstart company that has a potential to disrupt you);
B is your product’s competitive position relative to the competitor;
C is an action you believe is appropriate for that competitor.
Assemble a diverse group of participants. One team in your company may say that they don’t care about the competition, but very often, other teams absolutely care about it.
Create a list of competitors and add it to the board.
Pick one or more CAPABILITIES that you and a competitor share.
For our Example #1, I came up with an imaginary video platform for makers and DIY-enthusiasts and compared it to YouTube and Instructubles. For YouTube, I selected monetization, project building experience, and interactivity as key capabilities.
Then, fill in columns A, B, and C for each capability. Keep in mind that you can lag a competitor and not want to improve your position, but also you don’t want to slip further behind.
When you are done filling in the board, initiate a 15-20 minute discussion to prioritize competitive gaps that are important to close or maintain. During this discussion you can ask your team:
What type of competition is the most dangerous in the short team? And in the long term?
Are there any capability improvements that would be easy for us to implement? What are they?
What would be the most impactful capability improvement in the short term? And in the long term?
If you have indicated that many capabilities need to be improved, ask yourself whether it’s actually feasible to improve all these things. You may need to prioritize.
Are there any capabilities that are missing? I see a lot of teams identifying only the most obvious ones.
To wrap up, the goal is not to obsess over competition. This exercise will help you be super clear about competitive assumptions and what you need to do to address them.