Competitor Analysis

Direct, Indirect, and Substitute Competitors

Teams usually name the obvious rivals and miss the ones quietly taking their customers. Three buckets keep you honest:

Direct:same problem, same way, same people. Figma and the old Sketch were direct rivals - design tools for the same job.

Indirect:same problem, different way. A meal-kit service competes with recipe apps and supermarket ready-meals - different shape, same job of "get dinner on the table."

Substitute:what people use when they buy nothing. For a lot of software the real substitute is a spreadsheet, a notebook, or "we just email each other."

Pro tip: Ask a few users, "What did you use before this, and what would you go back to?" Their answer names your true competition - often not the rival you were watching.

Reading How They Play

For each serious competitor, read the choices behind the product, not the pixels.

Who they target.A tool aimed at large enterprises makes different bets than one chasing freelancers - in pricing, onboarding, even how many features it shows.

How they make money.Free with ads, subscription, per-seat, usage-based. The model shapes everything: a per-seat tool wants your whole team in; an ad-supported one wants your attention, not your money.

What they claim.Their homepage headline is the one thing they most want to be known for - and, by what it leaves out, what they've chosen not to be.

Where AI Helps

Prompt: "For [product] in [market], list likely direct, indirect, and substitute competitors. For the top 3, give target customer and pricing model. Flag anything you're unsure about."

AI drafts the list; you verify it.It names competitors fast, but states dead products and old prices with full confidence. Confirm against real pricing pages and real users.

Moats & Weak Spots

A moat is whatever makes a competitor hard to displace even when someone builds a similar product. Attack a strong moat head-on and a nicer interface won't save you. So before you pick a fight, find the moat - then find the edge it can't defend.

Finding the Moat

The common moats, with what they look like in the wild:

Network effects:the product gets more useful as more people use it. Figma files live in the browser and are easy to share, so every shared file pulled in another teammate.

Switching costs:leaving hurts. Once a company runs its sales on Salesforce, years of data and workflows sit inside it, and moving is a project nobody wants.

Brand:people reach for the name by default. Slow to build, hard to copy.

Distribution:they can put the product in front of people cheaply. Microsoft Teams grew fast largely because it came bundled with software companies already paid for.

Data or scale:more usage feeds better recommendations or pricing that newcomers can't match yet.

Where They're Weak

A moat points you away from a losing fight. The opening is wherever the competitor can't or won't follow:

• They can't afford to change. A model built on many small ad-funded users makes it hard to serve a few demanding paying ones - and the reverse.
• They ignore a segment. Tools built for big enterprises are often heavy for a solo user or tiny team - the gap Notion walked into against older, heavier workspaces.
• They're stretched thin. A product trying to be everything is rarely the best at any one job. Being sharply better at the one job a group cares most about is a real position.

Pro tip: Turn every strength into a question: "What does being strong at this stop them from doing?" A competitor's biggest strength usually creates its most fixed blind spot.

Not the Same as Benchmarking

Keep two activities apart. Competitive benchmarking compares interfaces and flows in detail - how each product does onboarding, how many steps checkout takes - and lives in your research work. Moats and weak spots are about the business behind the interface. Benchmarking tells you how to beat a screen; this tells you whether to compete on it at all.