Competitive analysis: it’s a skill that we hone early in our product management careers and use often as our roles mature.
We do it feature-by-feature, breaking down each competitor’s offering into individual units of functionality. We see who has the functionality and who doesn’t and for those that do, we document how they’re doing it, the limitations they put on it, and how they talk about it. We capture the information in matrices and screenshots, and refresh it every few months. We use our competitive analysis to build better versions of our own functionality or maintain an existing edge.
While it’s not the only resource we use to make prioritization or scope decisions, the above process helps us understand where innovation is happening in our product category. It keeps us on our toes.
Or does it?
Understanding what the top products in your category do and don’t do may make you a well-informed product manager, but it doesn’t necessarily make you a strategic one. Here’s why: when you dissect functionality, you miss the impact that occurs when that functionality is combined. Combinations of features create user experiences which in turn shape user expectations. Those user expectations affect how they perceive the quality of your product. When you focus on feature comparisons, you’ve zoomed in too close to see this threat.
Robinhood’s impact on fintech
Let me explain with an example: Robinhood. (Yes, that Robinhood.)
Robinhood made a name for itself by offering free stock trading and a slick mobile app. By reaching consumers who lacked direct investing experience — which is the majority of consumers in America — it set a precedent for what consumer investing should be: low-barrier, empowering, and always on.
Now, imagine you’re a product manager at a consumer fintech company. Robinhood is on your radar whether you’re a direct competitor or not. You know the ins and outs of its feature set. For example, Robinhood offers options trading and margin accounts, and you don’t — but you’re okay with that, because those are edge cases given your product’s target customer and value prop. For all other stock trading use cases, you offer a lot of the same functionality as Robinhood. Therefore, you sleep soundly at night.
You shouldn’t. (Sorry.) While it may not make sense for your business to offer options trading and margin accounts, you need to understand that those features, in combination with everything else Robinhood offers, contribute to its precedent-setting consumer investing experience (low-barrier, empowering, always on).
When a Robinhood-educated consumer evaluates your product, they’re using a set of expectations informed by Robinhood. The model of investing that Robinhood has championed influences how they’ll perceive the value and usability of your product, regardless of whether your feature sets match or not. Approaching your competitive analyses with this in mind ensures you’re taking a user-first approach to evaluating your competitors.
How to create a better competitive analysis
To be strategically useful, a competitive analysis needs to include more than just feature comparisons. Consider the experience those features contribute to, and how that experience may be shaping perceptions of what a product in your category should do. Going back to the example above, if you’re not thinking about how to make your fintech product feel accessible, empowering, and always on, you won’t successfully click with your end-user, regardless of your product’s feature set.
To create a competitive analysis that incorporates user experiences, I recommend incorporating two additional dimensions to the feature-by-feature comparison that’s commonplace in a typical competitive analysis:
- A hypothesis statement describing how users perceive the value of each of the competitors you’re evaluating; and
- Adjectives describing how those competitors’ products are influencing the industry you’re a part of.
These two additions ensure that you won’t only be looking at feature parity as a way to leapfrog your competitors. They’ll help you think about how end-users experience your competitors’ products, which is often what makes a product memorable and engaging.
Experiences matter more than features
Building user-first products requires constantly thinking like your end users. Your end users don’t encounter a product feature-by-feature; instead, they have product experiences as a result of features working together. Understanding how your competitors are creating memorable and category-defining product experiences will make you a savvier, more strategic product manager. It starts with a stronger competitive analysis: one that considers a user’s perception of value and the way the product is shaping the industry around you.
About the speaker
Katherine Kornas is VP of Product at Betterment, where she leads growth, mobile, and money movement product teams. Prior to joining Betterment, she was SVP, Product at Havenly, and held product leadership positions at Pandora and Autodesk. Katherine has also worked on product teams at Dictionary.com and GreatSchools. Katherine is a graduate of the University of Michigan and currently lives in New York City