Hiten Shah of Kissmetrics and Crazy Egg wants to help you rise above competitors—but he also wants you to learn from them. In his talk at SaaSFest 2016, Hiten explains why both your customers and your competition can be your greatest sources of learning and your most powerful tools for building your product.
Below, we'll walk through Hiten's powerhouse talk and dive into the importance of communicating with your customers, your competition, and your customer's competition. You can't create your company in a bubble. There is a wealth of valuable information available to you if you're willing to do the research and learn from the industry around you.
Competition Can't Be Ignored
You can't deny that your SaaS business now shares its space with competition. Should you pay attention to your competitors, or should you only focus on your own business? According to Hiten, there is only one answer.
Hiten points out that competition today is getting more aggressive as more VC funding goes into the market and the SaaS industry expands. Your competition will be there regardless of whether you choose to acknowledge it. But if you take initiative to learn where your competitors are failing your customers, you can use a crowded industry to your advantage.
Doing research on your competitors—and more importantly, the customers of your competitors—will help you get that competitive advantage to create a better product and better serve your customers. And your greatest source of valuable information for research is your potential customers themselves.
Take Time to Do Thorough Research Up Front
Hiten says that the number one mistake he sees in SaaS startups is not doing enough research on customers and on competition.
Customers are the backbone of your business. Learning more about your customer and the other options available to them will give you access to a wealth of powerful business tools. Acquisition by brute force is no longer a useful tool. It's easier than ever to create software and it's going to keep getting easier, so you can't rely on simply presenting a SaaS solution to develop a happy and loyal customer base. You need to know exactly what your product needs to accomplish to make them sign up and stay.
You can learn how to build the best product for your market by directly asking how potential customers currently deal with the problem you're trying to solve. If your market currently uses other tools to solve the problem, ask about them.
Don't shy away from asking your customers about competitors. Those competitors are going to be there whether you ask about them or not, and you don't want to be stumbling in the dark. Insight into the tools that are currently useful to potential customers will tell you more about what your market wants and where to look for potential improvements.
Taking the time to learn from your potential customers can take your business in unprecedented directions. It can inspire new strategies, new features, and even new products.
Learn From Your Competition's Unhappy Customers
Take it from the SaaS guru himself—Hiten has experience successfully building companies by asking these questions and learning from his competition. He swears by the mentality that your competition's unhappy customers are your greatest source of learning.
Hiten began building Crazy Egg by determining what was wrong with Google Analytics. By creating a landing page for his then-unfinished product, he was able to determine that Google Analytics didn't track all page clicks, and that this feature would be useful to potential customers.
Hiten then put his hypotheses to the test with—in his words—a shitty MVP. Your early customers will be an incredible source of feedback and learning. Don't fuss and perfect your product in a vacuum. Get it out there, and get some real feedback on it. You can collect valuable information by asking these customers:
“How would you describe our product to someone else?”
“What's keeping you from buying our product?”
“What other tools are you considering?”
“What led up to you buying our product / churning from our product?”
Crazy Egg gained a competitive advantage by doing something that the competition wasn't doing. You have to listen to your research and act quickly, because if something is good for the customer it will quickly be adopted by competitors and become the norm. But by learning and acting faster than the competition, your company will innovate in your industry.
Hear it Directly From the Horse's Mouth
It's faster to do research than to write code. Upfront depth prevents you from building the wrong things. Insights from research save the kind of time and money that SaaS startups can't afford to let slip through the cracks.
But this is a huge missed opportunity. Most SaaS companies have less than 10 customer development conversations per month. Now is the best time to start talking to your customers and listening to your competitor's customers.
Do your research and use it to learn, plan, and innovate.