Think of Competition in a broad fashion
I just re-watched this fantastic interview by Reed Hastings, Netflix CEO. While there were so many valuable takeaways — the one thing that struck me the most was the way he talked about the competition that Netflix considers and encounters everyday. Transcribing the related response below:
Interviewer: Do you compete with Jeff Bezos (Amazon CEO)?
Reed Hastings: Yes, we both compete for shows. Netflix bids against Amazon and HBO for original productions. But then when it comes to entertainment, people will consume from multiple sources. So really we compete with everything you do to relax — that is to say, we compete with video gaming, we compete with drinking a bottle of wine (which is particularly a tough one), we compete with playing board games, we even compete with your late work hours, etc etc.
Think of everything you do to relax. Or just think of any night you did NOT watch Netflix, and all the [other] things you chose to do instead — those are all in our competitor list.
This simple piece refined my understanding of competitor analysis!
As much as we emphasize on asking the right questions while building products, we must also be fully aware as to what and whom we actually consider as competitors — because this perspective can strongly influence a product’s horizon in the long run.
Essentially this kind of approach could also bring in good clarity about the problems we decide to tackle and the problems we decide to overlook.