Analyzing Competitors in the Technology Space

October 16, 2018

Dear Strategy:

“What are the strategies that a Tech Product Manager can use to predict competitive movements, innovations, and/or changes in business strategy?” 

Way back in Episode 36, I talked extensively about analyzing competitors, and even gave some tools that you might want to use to perform such a task. So, I would definitely recommend that you go back and refer to that episode if you have a chance. With that said, what makes this question a little bit different is that the subject here has specifically to do with the technology space. And, although the process of analyzing the overall strengths and weaknesses of your competitors will be more or less the same no matter what industry you are serving, the challenge in the technology space is that things just move so darn fast. And with that speed comes a unique set of challenges that will ultimately form the basis of my answer to this week’s question.

The first thing one has to realize when working in the technology space (and just to be clear, I am using this term to refer to any company that delivers software as its primary product), is that, for any given customer problem, there are many, many similar solutions available. The reasons for this are twofold: 1) It is difficult to patent software solutions, so imitation is a fairly commonplace occurrence in the software space, and; 2) The development process moves really fast, making it difficult to enjoy any level of dominance based purely on feature differentiation for too terribly long.

In practical terms, this means that you may not be able to rely on features alone to differentiate your products in the software space. Now, that’s not to say that features aren’t important. But, unlike some of the more traditional tangible product markets where you can safely differentiate on features for (in some cases) many years, relying on this strategy in the software space is likely to be a recipe for disaster. If you are using an agile process (like just about everyone else), and you are responding to customer needs (like just about everyone else), then you are likely to have a pretty similar product to just about everyone else. And this is what causes competitive analysis in the technology space to take on a slightly different meaning.

Let’s take a look at an example…

Being a small business owner, I, at some point, had to choose software systems that would help me to accomplish all of the following tasks (in no particular order):

  • Accounting
  • Marketing Automation
  • Email Management
  • File Sharing and Backup
  • Virtual Phone Management
  • Web Conferencing
  • Meeting Scheduling
  • Graphic Design
  • Website Design
  • Landing Page Development
  • Website Hosting
  • Podcast Hosting
  • Online Course Hosting
  • SEO/SEM Management
  • Social Media Management
  • Audio Editing
  • Video Editing
  • Survey Management
  • To Do List Management
  • Project Management

That’s 20 different systems. And, honestly, there’s even more when you count the numerous add-ons, plug-ins, and applications that I use in addition to these core systems on a daily basis. The point is, for each of these needs, there were multiple solutions that I could choose from. And when I say multiple, I don’t generally mean 2 or 3 choices. No – I’m talking about 10 or more options for each need. In fact, I would go as far as to say that navigating through all of those options consumed the majority of my time as a start-up business owner for at least the first 3 months of my company’s existence.

So, what was the process that I used to land on the choices that I ultimately made?

I started with choosing systems that did what I needed them to do. So, if there was a feature set that I absolutely required, I started there. Of course, most of what I needed was offered by all of the suppliers I was looking at. So, then I moved on to the extra features that each system offered – trying to anticipate along the way how I thought my business needs might change as my company grew. That thought process actually allowed me to eliminate a few options in each category, but I was still left with far too many choices for me to comfortably digest.

Once I was done feature shopping, I moved on to things like interface, reputation, and generally how trustworthy I felt each prospective supplier was. My biggest eliminating criteria here was that I didn’t want to end up choosing a system that looked too “small” – mostly because I assumed I would end up receiving an overall unprofessional experience. I wanted to be a “real” company, so I wanted my suppliers to be “real” companies too. If I’m being honest, a lot of factors went into deciding how “real” a company was, including the brand, website, user interface, reviews, etc. But, ultimately, if a company felt even the slightest bit underfunded (admittedly to my own very skewed definition of the word), I took them off the list.

Once that was done, I moved on to price. Usually, this didn’t allow me to eliminate too many players because, frankly, most of the remaining options were similarly priced; and those that weren’t made me question if they were the right fit for me in the first place. In other words, if an option was priced too high, I assumed the system was made for a much larger company than mine. And if an option was priced too low, I reverted back to the system probably not being as “real” as I wanted it to be. So, although it was important to me, price wasn’t usually my ultimate deciding factor – mostly because there wasn’t enough difference between the remaining options to allow my process to end there.

In fact, my final deciding factor came as a bit of a surprise even to me, and I don’t think I ever really sat down and analyzed this criterion until I actually experienced it as a user. For my last filter, I found myself checking out Facebook groups, poring over blogs, and generally trying to get a sense for what types of users were most connected with these last remaining systems on my list. In short, I wanted to see what community I was getting ready to join and, more importantly, I wanted to see if I was a fit.

Buying a software solution is kind of like joining a club – and, frankly, I wanted to make sure that I felt some sort of kinship with the other members of whatever group I was about to join. This was probably one of the most important elements of my final decision, and I imagine it is also a facet of the decision-making process that would be fairly easy for technology companies to miss – at least when it comes to the subject of competitive analysis.

So, if you take these steps in the buying process and break them down, these are exactly the types of things I would be analyzing about my competitors if I were a product manager in the technology space. That is:

  • What products and services do they offer?
  • What features do they offer?
  • What type of user experience and interface do they offer?
  • What is their reputation in the marketplace? (Size, scope, share, quality, etc.)
  • What is their pricing model?
  • What community of customers are they positioning themselves to serve?

This isn’t a list that I pulled out of a textbook. This is based on how I, as a real user of software products, make my decisions. I can’t guarantee that it will be the same process for everyone, but I can guarantee that if you only focus on features, you’ll be missing at least 80% of the picture. And I can also guarantee that, in a world where features are released really fast and without the protection of patents, all of these other areas represent opportunities to differentiate yourself in ways that your competitors might not be thinking about.


Listen to the podcast episode
Dear Strategy: Episode 065




Are you interested in strategy workshops for your product, marketing, or business managers? If so, please be sure to visit Strategy Generation Company by clicking the link below:

Strategy Generation Company - Strategy Training and Inspiration


Bob Caporale - Host and Author of Dear Strategy Podcast and BlogBob Caporale is the founder of Strategy Generation Company, the author of Creative Strategy Generation and the host of the Dear Strategy podcast. You can learn more about his work by visiting

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.