If you want to be a bad product manager, worry about your current competitors. They are the ones taking sales away from your product right now. Going forward, they are the ones you need to worry about most since they are already in your market. Your current competitors are products which potential customers already buy and use, and your focus should be on converting those people over to your product.
If you want to be a good product manager, worry more about your potential future competitors than your current competitors. Understanding and monitoring current competition is an important part of being a market-focused product manager — you obviously need to understand the market. However, current competitors pose much less risk since you know who they are and can be on the lookout for them. The competitors who have the potential to blindside you and totally change your market are the ones who should be of more concern.
Blockbuster Video was focused on competitors like Hollywood Video, smaller chains, and pay-per-view on cable and got blindsided by Netflix. Tower Records was focused on physical competitors like Virgin Megastore and online competitors like Amazon.com when they really should have been worried about iTunes. Nokia and Samsung and Motorola were trying to one-up each other when they should have been preparing for the onslaught of Blackberries and the upcoming iPhone.
There are probably products out there right now that have the potential to put your product out of business, and you likely do not even know their names. You likely do not even know the companies responsible for them. You can prevent yourself from being caught off guard by following these guidelines:
- Keep on the lookout for potential threats. If you are not devoting some time to proactively finding new potential threats, by the time you find out about them it may be too late.
- Take potential threats to your product seriously. In most cases, products and companies who have been made obsolete by disruptive technologies ignored the warning signs early on. It would have been easy to dismiss Google, eBay, Amazon, and the iPod at first glance, and many did. That said, for every Google and eBay there were dozens of also-rans that fizzled out, and it would be easy to play the percentages and dismiss upcoming competition. However, it is probably better to “waste” some time so you are aware of competitors that may end up not impacting your product than to “save” time and not worry about competitors who ultimately could put you out of business.
- Run through possible scenarios and how you would react. What would we do if Google, or Apple, or Wal-Mart entered our market? What if there was a startup who in 6 months could offer a similar product for cheaper? Run through these scenarios regularly and prepare your product in case these actually happen. This may involve changes to your product, partnerships, distribution, or promotion.
Monitoring current competitors is important, but the competitors with the greater potential of upending your business are the ones that are currently either unknown or in unrelated fields. Good product managers need to be on the lookout for disruptive competition and need to be proactive about product development so that other competitors are more worried about you than you are of them.