Hey, this is Sally after he and his eating

shop and in today's episode of the solar trip, gonna talk about competitive product development.

You like talking about more than your sales

and market. We just want a bullshit and chat about business and life. And hopefully, while we're doing that, provide along value Teoh for people trying to get shit done way. Don't want to give you feedback. That's

bullshit. You want you to do

your best. Buy s over college. That's what we're calling. Were just coined this. And it's basically a phenomenon that we're seeing in SAS with some of our companies, not products where if you have the software category that's competitive, which is most have

most software unless you pick a really, really archaic niche. There are somewhere where there's, like only enterprise software. Yeah,

most of them are gonna be very competitive. Yeah, and in those Kennedys to date, because of the resource is that are out there because of the knowledge because of the technology, because of the skill and the resource is the product development is moving faster than the standards are going up at a faster pace than we ever used to get so both keeping up with that. You know, senior competitors, adding some things that made you unique or seeing seeing certain companies that are big categories in your space kind of Just copy the little things that make up your type product. Yeah, right. And observed, with the value that you that you often to the

right and give it to their cause,

is given to the customers sometimes for free, for free, right where you were, the add onto that platform. Now there's no need to

add You will not

exist. Yeah, and also the quality of wind, ux and design speed. The quality of platform. Caroline It's all up that that the customer expects this thing not just to be on the Web but working all browsers on all operating systems. But they also expected to work on all smartphones or tablets. They expect a 1,000,000 different things because this is just the standard. Is moving up really, really rapidly. And I think that's something that well, if you already established the market, it's a pressure, a competitive product development pressure that you're fueling in your space if you're not, if you're just launching something, I think it is a fact that many people are not get aware because it's not being talked about a lot yet. So I think a lot of people that are thinking about starting a business or starting scientist is there just like,

let me have a simpler version off something that's already existing and I'll have my little beach. But then what we see in many converters, the sales Canada is that sales enablement court a court categories. A great want for this is that there's all these little tools and are an add on 20 serum. Let's just call it that, but they allow you to not tracking looks. Yeah, evil opens. They allow you to use it to send up on a secret fashion or something. They start, and then because it's fairly simple to build what they do. But it provides good value. There's like a A. There's a shit ton of competitors like that outbound email. Think that I describe very incredible

like the last 18 months since the beginning of last year. You just saw

an explosion explosion vessels, and this is 20 companies that just do this thing. Yeah, it it is. I know a guy that that's doing this under Ukraine, that it took them literally, like two or three months, and the product looks polished as fuck like it just looks great, because I didn't have to do a lot of customer development in you. There's people paying for this. They need the craze value. They looked at. What other people do they have. A great resource is to developing designs from boom. They probably it looks great, right right out of the bed in a very short period of time. And you have,

like, venture funded companies and you have so founders. You know, I know a guy in Switzerland that has a product that competes with these venture funded parks and two from the Hollywood works. It doesn't

it's not any different,

right? Have that and then at the same time, give the bigger place in the market that have more complex products that look at this look that our customers are paying some extra money for this ad on that they're thinking maybe we should just we will add This is

a teacher and and it's easy as any company larger, small, just asking their customers. What else do you use. What else do you do? You like it. So you like it? You can't live without it. Okay? We're just gonna add it. Yes. How about that? No back. You know, we could cut off that paying that little company that.

Yeah. So how did we So this is an issue today. I think that more more companies are finding themselves in as they continue to do that product about what they see, that it's harder hunt to build something that stands out that is unique, that does things that other products don't already do. You and that delivers that value in a way that makes the use experience like, great, not just okay, but people go. Oh, this is really nicely designed. This really easy to use with fast. This is really reliable, Like the that standard just gets harder and harder because Baltimore Amazing proctor being developed all around the world that instead a new sander standard for what people think is great software. Right? If you wanna have great software, that's a moving target that never

ends. And it didn't use to be like that.

Didn't use it. Let's talk about that. The history you know you have a much longer easier and developing suffered products that I that I do. Um, how was it? Wasn't just slow of the same thing, but

much slower. And suddenly you used to be able to take a feature out of a product and make it much better and create a lot of value for yourself and your customers as a result, where someone didn't need to replace another product to users and then usually that happened through you as a founder, future founder, starter of a business, whatever. We want to look at it creator, looking at a category, using the products and be like, Oh, this part, this full thing sucks or this part of it sucks. So I think I could do it better. And I think there's another people like me. So then you would literally go build it, and people would actually come to you because that if you hit the mark on that thing being important, enough people would start using your product and they'd used in addition to the other product,

this is like I would say it the way it worked from like since I started about 040405 to probably 2011 to 12. Ah, actually around 0809 It definitely depressed because of the housing market and all that. So there were start ups and stuff like that. But by then, Amazon was aws was just going at it right, providing a lot of value for very little money. In terms of you don't need servers anymore in anything you just use AWS. And now AWS is like the backbone of every friggin software company that starts, you know? Sorry, all the other cloud companies. But they suck for starting compared to eight of us today, whether it's free credits or whatever. So it's easier than ever to build software. In fact,

like the multiple iterations of Kiss Metrics that we built now can be built in less than a month and the whole thing and I mean the hard parts of it, the tracking, that analytics scaling of it. If you even remotely kind of know what you're doing is an engineer, you can figure out how to build that thing really fast. Well, before it would take us three months, six months, nine months to get it to the same place we can get something in a month, so they just ability to create software that's complex. It's just much faster now, right, the ability when there's a lot of stuff out there, there's also a lot of inspiration you can get. So the more software that's out there, the easier it is to look at and be like,

Oh, great, they suck at these 10 different parts of it. We can just go build it. So it's just easier than ever to build more complex software would be the state now. So in that scenario, you're sitting there and you either. One thing that's obvious is you just need to have him. Not just, but you need to have a much better relationship with the customer. If you have a much better relationship with the customer, that might help. So this is why the crop of us that are doing content marketing to educate the customer. We're building brands and I know I've blogged about this and stuff and we have talked about a two. But if you're building a brand through content and educating customers, whatever way might not be constant might be other ways.

Although everything's content. But then what happens is you have affinity. It's. And if they have affinity with your brand, then it is likely that it's gonna be at least a little bit more thicker instead of or maybe even a lot more stickier than that big conglomerate that's not doing anything for them. For example, the experience put you on blast on this. But Sales fourth does not tell you how to do sales. Say it again. Sales first is not Buck and tell you how to do sales. They just provided tool that everyone apparently uses close dot Io actually tells you how to do sales, and that's even before you use their product. So then the mentality is Imagine what they could do for me. Imagine how good their product must be if they're already teaching me about sales and they are right. Yeah, so I see that as as a key advantage home and something that I don't think people realize which is not soft right.

It has nothing to do with engineering, actually has everything to do with marketing, maybe sales and positioning and brand. So that's a way to amend this right? But that still doesn't get you too far. Because if you're building a little shit tool, that's a feature of Salesforce, and you think you're gonna take that and build a humongous business on it? Those days are coming right? There isn't probably gonna be more tell cops, right? There were even Mawr. I don't know. You know all of them in the space, right or yes, where's right?

In fact, the classic study now is that yes, we're used to exist and a bunch of others that would add a plot. You add a plugging in tow Gmail and it would track your opens, help you do he mailing the street. There's a bunch of these right that helps thought came out with a little tool that's there to when they put all their marketing, all of it had it not all of it, but all of it. Right? And there's even been threads on core up about how you know, help Spot is copying us where the founder is going at it. But the fundamental Theis helps but discovered there's an opportunity to build a free product just like the other ones in grab market share that they didn't have yet and that is happening because it's easy to build that stuff right? And when you're a really large company, used to be that large companies, you slow. Well,

there's eight of us now there's they They have a lot of customers already in software over so mature, even large company software company. These air, like the newer crop, I don't mean the Googles and its center, the role. I literally mean hub spot, even to some extent, workday. And a lot of these companies that are sad relic that have gone public. If you're building a little tool for them, watch out. They're actually pretty good at product development. And if they're not as good as you, they can get there much faster than ever before. So you're dealing with this dynamic. So I guess the next step in what do you do about

Yeah, what do you do about it? So I think that, um, I think you need to realize yet that these big companies, they, uh they're able to move faster than the big companies of the past. And that is a great example, because what they did is so when they before they launched this year in part even before they get a small sale full tool. And they did the serum think before they did the serum thing, they literally spent months logging into all the serums that were out there researching, researching, and they created a copy paste here, the cool shit that anybody is doing. And if we do these three things from them with these sticks, then we have something that looks really cool. But that product,

like I can cut out parts of it, and I could go over and say This is where they sold from these guys. This is what they stole from us because that's what they did, right, because it works now the words

that have teams, they can spend a 10 person team doing what you just described when you're three

people and then but then they have 1000 person team. Can the marketing into the continental with the stuff to generate all this traffic to this part? Right, So that's something that everybody needs to be aware of, and the only way to talk about how do you react to this? So they what is already kind of in the middle of what you were describing, Which is, Can you build a brand like What? Can you do the sights just writing coat. If you have just a piece of code, there's nothing else, and people have to magically find it and decide doesn't have all the features. Do I buy it or not? There's nothing else around around what you do, then eso Which one thing. You can't do it. You must do it.

A more more competitive world is. Find other ways to translate yourself when we have doing that is creating a brand by creating finding other ways to build a relationship with your customer, being closer to your customer and creating value for your customer any way possible beyond just the product that you often write. So that way, when I there's certain brands, I buy where I meet the buying decision to that brand prior to looking at the product of the brain. I know I want to buy something from this specific company in this area, and it didn't research all the companies because I already have a prior relationship with them. I like that quality like this story and whatever it is, I like what it says about me if I owned this thing. So it suffers is never gonna be like a luxury product exactly that. But it's moving more towards that from that space. Nothing you need to do is you need to have a point of view. I think it becomes more mawr important to a really strong point of view, Which means either you can keep innovating. They can come and copy what you did.

But if while they're copying, you're doing the next thing, that's awesome. That's different. Then again, the moment they already But they now have something you already have. You have something they don't have, right? So you're competing by innovative. You're competing by creating things in. A lot of this seems so obvious, but a lot of people, when they start something small, they don't have enough of a point of view. Enough of, ah,

of a process of innovating. They don't think beyond that first step there. Like we had this little idea, it's gonna create value. We're gonna develop it and the moment that have it, and somebody copied it game over, because now they're indie. I'm a big business, that process where they're like let me copy. What? Everybody else already? Yes. You're fucked at that point. If you can't come up with the next tiny thing that nobody has, that's kind of cool. And then the next to anything, and then the next, anything You're gonna be in trouble.

Yeah. 10 things that are innovative don't help. Yeah,

So you know, you don't have to come up with and you're gonna have to be able to innovate a really accelerated rate. It invested the team of the company and the infrastructure to be able to do that. That's very, very hard to do finer

than ever. And because they can do it too. They reading any competitive? Yeah. So I wanted to double down on the point of use because I think it really just boils down to that. So the thing that came to mind is in a world where enterprise companies were mainly targeted as Fortune 500 companies back in the day, 37 signals sat there and said, No, there's the Fortune five billion. I believe they said that. And those are the people were targeting. We don't care about the fortune. Five minute. We care about a fortune. Finally, that was strong position. I still remember it.

They might have shied away from it now a little bit, but it would still work right, which is everyone else's. Targeting these enterprise companies. We're gonna give you a product that's much different for you because you can't use those. It's a classic strategy of go after a customer. They're not going after that one. It still works. The only issue with that is, and I'll put pecan helps. But again, in a good way, they decided they wanted customers that were different in the core ones they had on the hot spot product. So then they build new six and then they go after it, just like a startup did that. So it's been in their case.

It's a strategy decision. So here here's a statement I would make about that. I think the smaller, smaller companies now have to think much more about how they fit in the market and the strategy that they should have over just building a little for building a bunch of stuff. Strategy become so much more important, even days

era. Yeah, it's so true, and I want to go back just one step to what you said because I think it's important. Oh, highlight this and understand is that it's not so much anymore. I think What is a customer this bigger Companies not going after sell it us go after them because increasingly they're going after everybody. But what is a customer? They don't value as much

that we could make my

own can make money and value really, really highly right? That is the thing that you want to tell people is we care about you the most and we're gonna display that in a 1,000,000 waste versus if you go into this computer, they'll take your money. But they care about somebody else a lot more, right? So that

that's key. Yeah, I was just gonna say that for 37 signals it, Yes, here's what else I'll say about that cause I want to make sure we have even more value to people. That's like classic disruption. So even that can get you could be really tricky today, because that big company is going to care about that little customer at some point will likely include targeting it, that increasing Yeah, it's definitely not in every market, but it's an increasingly important thing like I am sure Salesforce would love to have all your customers. I don't take it away from them, right? And if they're really slick about it, which they're not in their case, well, they're not yet sorry.

Yeah, they would go find a way to go after them to write what? One other strategy. So we can cross the strategies right? That is that I thought up is in my head about this is like is if let's say, Salesforce's CRM tool does a bunch of tasks for people, right? There's other tasks that people need done in sales, that they aren't able to do. What Salesforce and I don't just mean software solution. I mean things like Salesforce doesn't tell me exactly what message I should say to whom and went right. So if you built a tool and a hot all of Salesforce's stuff and added differentiation like that, that actually was correct for the customer and reduced friction for them, that's huge. So, for example,

I think tell, has this but tell app has a ton of templates. They're out there that you can literally, I believe, is click and take into their product and send an email with that template. That's game changing for a lot of people. If topped with better at marketing it, I bet that could be a big differentiation differentiator for their prime. I don't think they're great at marketing it, but they did step their toe in the concept like that. That's what I mean by there's a bunch of task people do. They're only doing a finite amount of them in the current products. Can you find other tasks that help you with marketing? Opposition are actually embedding it into the process.

Let me ask you something. I meant to ask you earlier, and I forgot about it in the discussion. But I'm wondering how much of this is a cycle in the sense that certain, you know, yet give transcendently of anti transferred. So you had the first generation of really cool websites and get the Amazon and the E base and all that and get the cracks is the common example that shitty looking website single dude, not a big Silicon Valley thing, and boom. Still, it had, like a massive appeal, maybe because it would look so approachable. Maybe it looked less carpet think. I don't know why, but I always think of like the matchup. Conversely, whatever the millions, official

or something, I can keep it. Anything.

Plenty of fish, right? Where? Plenty of fish, especially because it looks so so Not beautiful. Yes, but it had its appeal because, Fran, because again it looked like somebody hoppy thing or wherever. I'm wondering some of the things that we're and then you have also be you have the trend off in SAS specifically sash product that does everything and then specialized satisfy this one thing

really, really well or specialized One industry, the same thing is something else just

for hospital? Yes, exactly. I'm wondering if we're going through a these cycles. And if you know that you can probably anticipate that and and make sure that you're just a step ahead

of the next cycle. I think it's about the cycle in your industry, with your customers. Yeah, so? So before it was big holistic cycles. A lot of the concept, or like bundling on bundling, which means, you know, lots of features in a product. And if you want to compete, unbundle it, take features out and do something about it, which still works. But I don't think that that plays out anymore because it's just so easy toe bundle features into a product, right?

So you might as well do that. Let's put a lot of great and so I think it actually breaks that pattern. But the bigger pattern is in your industry. What's the right approach that I go back to? Strategy? Even the point of view thing is a strategy solution. Essentially right is the fact that in harm market there are There is this opportunity for us and we're gonna go attack it because our point of view aligns with that opportunity. So back to some things we've talked about in the past, I think you're screwed if you don't do the research up front to understand what your strategy should be, considering your constraints or resource is and more most importantly, your point of view.

Yeah, on point of view, what if there's a lot to do with the way you see the world and the way you're gonna will the world the world to go into and also like, How line is that? With the strength of your team, the strength of the who you are in relation with, who you're serving and who's competing to serve the same person. And that's much farther to have. Like to really know what your identity and point of years as a company. Just it's really hard to know who you are as a human being like who am I? Totally. So just trying to be somebody else trying to be like other people. It's a tough thing, but it becomes increasingly important in the world where if you're trying to just be like everybody else, there's no value that anymore. Because those people that really created being that version and you being the thousands copies, like, not interesting anymore.

It's also like, used to be interesting when you could basically do marketing and just get the customer. Now everyone can just do marketing and get the customer. So it's not that interesting to just have a copycat.

Yeah, but okay, so let's talk. Let's end the episode. Maybe with tips, right? So you just said something that sparked the tip that I'm gonna shirt, which is you know, I think that your point of view, the part of you can be in the way that you're that you're approaching your product in the market can be much form broader than just the software itself. And we touched on this a little bit with life. Hey, you could you could service the customer by it pre loading a ton of templates and tell them hugging do certain things. But you when we talked about marketing, I just thought, you know, you could you could differentiate maybe not forever,

but for a while differentiate yourself, but maybe doing something similar than others, but marketing it dramatically differently. And that could be a branding point of your voice. Like everybody so conservative if you're gonna get the the virgin brand off, whatever your Sascha is, if that's appealing to an audience, sure, that cares about anything. But it could also be that you're that you're choosing a channel that is undervalued by most of them and you're like, we're gonna We're experts in this were channel, and we're gonna only hire more people that are experts in marketing in this were channel, and that's how we're gonna really be competitive. But you have to have a point of view in a in a strategy ballistically and not just I think we're gonna build a future that we know some people like and pay money for. And then hopefully that's gonna grow forever. Because in today's competitive market,

where people can copy your stuff really quickly where bigger competitors can integrate what you've done, that's a tough spot to be. And it's a It's a spot where you can be in successful, but you have a very short shelf life, like you're in this spot for 369 months and then all of sudden you're numbers are going down. And if you if you didn't anticipate that, it's fun like then you're you're almost data. You don't realize it. So think about everything you can do and pick the things that you can be better than your competitors are different in a way that your customer really values.

I love it. I'm gonna give a really elementary strategy. Your tip, which is you should do it helps knock it and go actually long into all the software, sign on camera and learn about it. See how they're doing things because I wouldn't just long in and sign up and figure take screenshots and all that I would take all that material, just like you would do it in a bunch of customer development interviews and go figure out what you should do. And I almost printed even giving people this advice cause I used to feel like the competitors didn't matter. But now, in these markets, when you have a ton of up, they matter more than ever on being delivered about that earlier on and your business will help you just form your strategy. It's not that the competitive matters you copy them, it's that they matter because you need to understand what people care about in these products. What are these products all about? And you should know what options are out there for what you need to do the only way to know it by looking at everything out there, right and again, it's saying, because it takes a lot of time and effort, but it can save you a lot of headache because you could essentially predict how customers gonna respond to your body.

I love it inconvenient CPIC and something that you know your old guys a few times and we're giving this piece of advice is the type of thing we didn't do that. We didn't look at any way went ahead. But as operators off, you know, kind of established, ask products in the market. And as we're seeing the competitive prices in the market, this becomes something that's just you can't be dogmatic about it. It is the practical thing to be much more work to competition of what they do and propaganda that that used to be, absolutely, that's hanging.