Who do you want to be when you grow up?

Are you a daisy or an orchid? Both are great. But you can’t be both.

When assessing the competitive playing field of any Software Product Category, we can use the following model:

competitive position.png

It’s important to realize that each of these quadrants provide healthy opportunity to create a valuable, profitable business. It’s hard to optimize for multiple quadrants though.

Here are some of the trade-offs that are easier to master when you know what you really want to be(come):

Technology

  • A value player will invest in technology to bring down the on-boarding-, service- and operating cost of the SaaS Service (the so called “Cost-to-Service”, CTS)

  • A Premium player will invest in R&D and Visionary Product Leadership.

Go-To-Market

  • Premium an niche players will likely go direct.

  • Value and Volume players will allow a channel to control (part of) the relation with the market, and just add their unique piece of technology to the value chain.

  • Niche players will hire experts in their vertical or segment to give them unique credibility and specialization in a small (but profitable) market.

Customer Success and Support

  • A value or volume player will optimize for low-cost, self-service support, and easy on-boarding.

  • Premium players will invest in Customer Success teams, consulting departments and paid premier support services to maximize individual customer delight.

Strategy

  • Niche and Premium players will likely build (and protect) their own Intelectual Property.

  • Value and Volume players are more comfortable with licencing, buying or partnering.

People

  • Value and Volume players can get by with great utility players who can get the job dove for a relatively low cost.

  • Premium and Niche players probably have to pay a premium to get the best people for their sales, services and engineering teams.

Marketing

  • Finally, marketing will be very different for each of these 4 quadrants. The difference from a branding, positioning, messaging, pricing and campaign perspective is vast.

So make up your mind, and then optimize for the quadrant you pick.