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The 3 types of ‘competition’ you’re facing & how to position yourself against them.
Hey - it’s Alex!
Today, I will share with you:
1️⃣ 3 Actionable SaaS growth tips
👉 The 3 types of ‘competition’ you’re facing
👉 How to position yourself against the ‘competitive alternatives’
👉 Accelerate referrals with referral pages inside the product
2️⃣ 1 Bonus tip by an experienced founder/VC/SaaS expert - this time by Mark Neale (CMO of Chargehive)
3️⃣ 1 Bonus material (software, content, news) - this time How Figma built an ecosystem to $20B exit
… that will help you quickly grow your SaaS product 🚀.
👉 Before you read on:
✅ Unlock your growth potential with 90+ actionable SaaS growth tactics (helped 150+ SaaS professionals)
✅ Work with me 1-on-1 in my 12-week SaaS GTM Coaching program for early-stage SaaS founders on their way to hitting the first €1 million ARR.
❤️ Get exclusive benefits for sharing my newsletter with your SaaS network.
1. The 3 types of ‘competitors’ for your SaaS
The responses I get asking founders about ‘What’s your competition?’ are mostly about direct competition. About companies that are building a solution that’s very similar to their solution.
But it’s important to know, that most early-stage startups are NOT losing deals to competitors. Most of the time, prospects don’t actively take a decision and stick to the status quo or they decide on an alternative solution to fix the problem.
So when talking about competition, it makes sense to differentiate between:
Status Quo (not taking a decision)
So think about competition in a holistic way. The objective of your prospects is to fix their problem.
And normally there are multiple ways to fix the problem.
Let’s imagine a company raised €5 million and now has 15 open jobs. So far they used a Excel spreadsheet to keep track of applicants. Hiring is slow and it’s hard for them to find the right talent and keep track of the applicants.
But the topic is really important for them, because not fixing it (not hiring people) has a massive impact on the future success of the company. A delay of 3 months in hiring the right salesperson can mean not hitting the revenue goal, which means having a hard time raising the next round, which could lead to running out of money etc…you get the point (it’s called the negative implications).
And now the company has multiple ways to fix it. They can go for recruiting software (like join.com) or direct competitors like softgarden, recruitee or personio. But they can also hire a recruiting agency to do it for them, increase the recruiting budget and give it to Linkedin…or stick to using Excel as their ‘applicant tracking tool’.
So now imagine you are join.com and want to pitch your solution to the Head of HR. It’s not about being better than the direct competitors and showing all the crazy features you build (which others don’t). First and foremost you need to beat the status quo and make them move and take a decision that your promised land is better than the (shitty) status quo.
So when it comes to your positioning, don’t just look ‘within’ your direct competition landscape - know how you position yourself also against alternative solutions.
2. Your positioning against the ‘competitive alternatives’
‘Competitive Alternatives’ is a term I heard first by April Dunford.
She recommend to ask yourself ‘What would a customer do if your offering didn’t exist?’
The answers to this question give you a great shortlist of your ‘competitors’. Most probably this shortlist consists of 1-2 direct competitors, 1-2 ‘old-fashioned’ market leader software, and 1-2 alternative ways to fix the problem (like Excel, manual work, agencies…).
So now when you’re working on your SaaS positioning, build clusters/buckets and think about how you’re different from them.
This way when you talk to prospects and need to communicate how you are different from your competition, it’s easy for you (without getting into feature battles or talking negatively about them). A good way to follow is:
💡 If you value X, then Y is a good solution. But if you care about Z, then we are the best product for you.
This could sound like the following:
👉 If you are a professional designer and your main job is to create visuals, then Adobe is the perfect solution for you. But if you can’t spend the whole day creating visuals (like marketing teams, early-stage founders etc.), but still care about nice designs, then Canva is the best product for you. And if you just need nice visuals from time to time and want the best quality, hiring a freelance designer is the best solution.
👉 If you have a big sales team (50+) and complex sales processes, then Salesforce is a great fit. But if your sales team is rather small and you care about an easy-to-manage CRM, then Pipedrive is your product.
👉 If you only have internal meetings with your teams, sharing your Google calendar to find the best meeting dates is awesome. But if you have a lot of meetings with ‘externals’ and don’t want to spend hours on finding appropriate dates, calendly is your go-to solution. If you are super busy and don’t want to take control of your schedule, outsourcing it to a virtual assistant is your best solution.
👉 If you are a city or municipality that only has a few resources to manage and these can’t be booked by externals, managing them in Outlook is a good way. But if you have 5+ public resources to manage and they are accessible to the public (paid bookings), Locaboo is the best solution.
Now once you have these ‘competition buckets’ it’s way easier for you to create a powerful message about how you are unique and the best solution for your ICP.
🚨 12-week GTM coaching program for early-stage founders 🎉
About the program
It's a 12-week 1-on-1 SaaS GTM coaching program for early-stage founders and leaders on their journey to hit the first €1 million ARR.
The program is designed to help you know exactly who your ideal customer is, how you position yourself in the market, and clearly communicate your value proposition, so that you consistently win new clients and be ready to scale your business beyond €1 million ARR.
The program is for:
✅ early-stage SaaS founders (or sales and marketing leaders)
✅ with a running live product
✅ ACV (annual contract value) below €20.000
✅ ideally with 1+ live customers and revenue > €0 (first paying customers)
👉 Interested? Check out my launching offer (Limited to 10 founders).
3. Referral program page inside your product
Referrals are step 5 of a successful SaaS Growth Flywheel (AARRR funnel).
And ultimately there are 2 main sources on how to get referrals in your flywheel:
number 1 is asking your customers for referrals (aka. referral program)
number 2 is making use of viral features in your product (learn more about them here)
The beauty of referrals is that it’s cheaper and more effective than acquiring completely new customers. When your existing customers refer others to you (for free or for a small referral bonus) they mostly refer peers to you, which means they fit your ideal customer profile. Referred leads normally have a higher trust in your business, belong to your ICP, and therefore also show higher conversion rates.
A great way to get exposure to your referral program is a page inside your product.
Of course, the in-product page of the referral program is just one channel to promote the program. Sending out emails to your happy customers or having phone calls (sales or customer success) can work as well.
BTW: I’ve launched my subscriber referral program. So if you get value from my newsletter, simply share it with other SaaS professionals who can benefit from it, too, and get exclusive benefits like a free 60min 1:1 session.
💡 Best tip, failure, and learning by Mark Neale (CMO of chargehive)
I like lemons, but we don't want to build one. This is how we avoid that bitter disappointment.
A lot of SaaS founders have the same challenge. They’re a solution on the hunt for a problem.
“What can I make?” and “What would I like to make?” are the worst places to start when considering what SaaS to build.
If you start from this place of self-service, you’ll have to be the luckiest person (or team) alive to accidentally hit on a solution to a problem that a load of other people will pay to have solved.
You need to find a problem worth solving. This is our tried and tested three-step process:
Build a list of ideas.
Every time an idea pops into your head, add it to the list. They’ll mostly all be terrible. Our list is called ‘The List of Mostly Bad Ideas’.
Collect critical info for each idea.
What pain(s) it solves
Who needs this solution
What the estimated market size is (TAM)
Who else is doing it
Is the market saturated
Could we really be better / different
Can we be passionate about it?
Do we have any moral objections
Collect customer feedback.
This is the critical bit. Get on Linkedin and find people who fit into the target audience for your product idea and pitch it to them, as if you had already made it. Ask them what they think, see if they would pay for it, see if it solves the right problems.
When we do this, we roll the feedback from each ‘interview’ into the next interview until the people we are talking to want to buy the product as if we had it now. When we hear ‘I need this now and I’m sad I can’t have it now” from a bunch of different people, you have a winner.
The best part, this takes very little effort. You could spend a year building a product and then see if anyone wants it, or you could spend three days getting people to tell you exactly what they want before you even start.
If you want an unrestricted peek behind the curtain of a SaaS startup's journey from $0 to $1M ARR, you can follow Mark’s journey here.
🧠 Do you want to be next and share your best tip with 1400+ SaaS professionals? Reach out to me via Linkedin.
💪 1 Bonus material (software, content, news) - this time: A GTM strategy breakdown of Figma (by Category Surfers)
Do you want to learn how Figma built an ecosystem to a $20B exit?
In this breakdown, you will learn about Figma’s GTM strategy, with a focus on product, distribution, and market.
Category Surfers - a weekly newsletter with breakdowns of GTM strategies and distribution tactics from the best SaaS companies.
Happy growth 🚀.
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