Of Substitutes, Alternatives and Pigeons – Better Understand your Competition

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My previous article (Substitutes vs. Alternatives) evoked interesting response and even now, I get emails with startups asking questions like ‘I am in SaaS enterprise play – how should I classify my competition under different categories).

Here is a great example of how a Durban IT company demonstrated the power of lateral thinking and showed how alternatives can be created, especially in cases when businesses are more worried about beating their immediate competition, i.e. substitutes and not focused on satisfying customers.

Problem Statement : Slow Broadband connectivity. ISP sucks. How do you tell them that they suck?

Solution: The Durban IT company pitted an 11-month-old bird (pigeon named Winston) armed with a 4GB memory stick against the ADSL service from SA’s biggest telco, Telkom.

Result? Winston the pigeon took two hours to carry the data 60 miles – in the same time the ADSL had sent 4% of the data!

Watch the video

So who did the telecom player compete with? Another telecom player or the Pigeon?

Imagine if somebody really starts this business (hypothetically) – i.e. a courier service only meant for transferring data? – the company will probably give a tough fight to telcos!

That’s the power of understanding your competition – and how your definition of competition can change, once you start understanding the buyer decision cycle.
What’s your opinion?

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