That is Not Our Competition

competition-2Most of us running a business, building a product or starting a venture think we get to choose who our competition is and exclude those who are not. It is commonplace to see the refrains,

“Their product is completely different from what we are building”

“Spunk is just a log analysis tool, we are about application analytics”

Well here is a sobering thought,

“We do not get to decide. Customers get to decide that.”

Here is a simple rule, for enterprise customers or consumers, whether you sell enterprise software or cycling class. Ask what budget is customer going to pay for your product? Everyone who gets paid from that budget is your competition, whether you like it or not. They need not be in the same industry classification, category, or provide same utilitarian purpose.

You need to focus on what job is the customer hiring the products for. Every product competing for that job to be done is paid for from the same budget and hence are alternatives.

Let me make this concrete with an analysis I recently did on Cycling classes. SoulCycle offers cycling classes at the cost of $35 per class. They position themselves as more than an exercise class at local gym,

“SoulCycle isn’t in the business of changing bodies. It’s in the business of changing lives.”

A quick analysis of twitter bios of fans of SoulCycle point out  this about customer job to be done-


They love life, they are into fashion, they are enthusiastic about life, they love music and food.

That means they are not hiring SoulCycle for just fitness but seeing it as part of their lifestyle choice. They pay for it from the same budget they would for fashion, pop culture or trying out gourmet food.

From the broader pattern from analyzing 44000 twitter followers let us see a specific  anecdote of one such customer,

“It’s definitely a bigger investment,” says Ms. Dougherty, who has curbed shopping trips and brought her lunch to work to afford her boxing-boutique investment.

So competition for SoulCycle is not just other cycling classes, Peloton that sells ride at home cycles, or other gyms. It is everything that is positioned as , “changing lives”. These customers pay for SoulCycle from the budget for “changing lives”.  Fashion, food, music, etc. all compete for the same customer spend.

If you do not define your competition this way and ignore a large swath of products positioned for the same customer job to be done you likely will not have a viable business for much longer.

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