Key Takeaways
- The most dangerous competitor is often the do-nothing option, not another product.
- User behavior is more informative about real competition than competitive analysis reports.
- Obsessing over direct competitors distracts from building what customers actually need.
The competitive analysis section of a startup pitch deck lists other companies in the same category. It almost never lists the real competition, which is usually the thing the customer is doing instead of using any product in the category.
Saim Abbasi asks founders a specific question to reveal this: what did your last 10 lost sales say they would do instead? The answers almost never name a competing product. They name an internal process, a workaround, a spreadsheet, or simply a decision to defer.
The Status Quo as Competitor
The status quo is the most powerful competitor for most startups because it has two properties that no product can match: it is already paid for and it is already understood. Switching from the status quo requires the customer to budget for the new thing, train on it, integrate it, and absorb the risk that it does not work as promised. The product that overcomes the status quo must be dramatically better, not marginally better, across a dimension the customer genuinely values.
What User Behavior Reveals
Looking at how potential customers actually behave, rather than what they say in surveys, reveals the real competition more accurately than any market analysis. If the customers who did not buy went back to their existing process, the status quo is the competitor. If they bought a simpler, cheaper product, the product is over-engineered. If they went to a different part of the market entirely, the targeting is wrong.
"The competitor that will kill most startups is not a startup. It is the spreadsheet the customer is already using."