Competitor Analysis Framework for SaaS Companies

Doing competitive analysis is a skill that I’ve picked up on an ad-hoc basis over the past couple years. I never received any formal training, but I wish I did, and this is why I’m writing this post.

One note: If you’re reading this, you probably have an idea and want to find out if someone’s already done it. Well, I hate to break it to you, but there are almost certainly people who have already done it. And if it’s a good idea, there are multiple companies already in the space with a solid product or service. Despite the popular mythology that companies sprout from novel, previously untested ideas, the majority of new ones enter a space that has already been colonized by someone else. After all, Facebook was the n-th incarnation of a social network (see Classmates.com, Friendster, MySpace).

So before you go ahead and use some of these techniques to shatter your dreams that you had a globally unique idea, please remember that successful competitors are actually a good sign. The question for you is how do you create a better team, pick a more profitable niche, find a new distribution method, or a myriad of other ways to unlock a new business opportunity that doesn’t involve “eureka”.

Now that we’ve gotten that out of the way, let’s get started!

Here is my framework to understand a market and the companies within it:

Preliminary Research

I usually start by putting myself in the shoes of the customer and Googling what I feel is appropriate. This will usually turn up at least one or two companies that are in my target space. The main objective is to figure out what most people call the target product or service. All of the other research depends on getting this part right, so don’t skimp here.

You’ll be surprised when you find out that everyone else in the world calls your product something different than you imagined. Especially if you’re a marketer. I’ve noticed over the years that marketers tend to love of coming up with new exciting jargon that doesn’t match what customers say.

Once you find a handful of initial competitors, delve deeper. Here are a couple of important places to focus:

  • Homepage Titles and Descriptions - The titles and descriptions of the homepage for a competitor were likely carefully crafted to match the most popular terms used to describe their type of product. If you see multiple competitors using the same words to describe their product in their title, there’s a high likelihood that that’s the keyword that most people search for.
  • Page Content - How do people talk about the type of product they are looking for? Not just on the pages of other companies, but also in forums and news articles related to the product?
  • AdWords Results - When you’re doing your searches, what terms cause AdWords ads to show up? Businesses optimize their ad spending to target the terms that result in the most business, so this is another useful signal to figure out whether a term is jargon or genuine.

Competitor Research

So now you know what people call your product. Congratulations, you’re already one step ahead of the majority of people who are creating a startup!

The next step is to build a list of companies in the space. You might think that this is the majority of the process. However, this part usually requires less thought than figuring out the language of the market and then analyzing the list. Luckily, there are many public (and paid) databases we can use to quickly pull up companies in a space.


Competitor Searches

Competitor Searches

As part of the preliminary research, you likely put together an initial list of companies. Start searching “[insert company name] competitor” and more than likely you will see listicles of tools, software review sites, and AdWords ads that will all show you more companies to add to your list. Unfortunately, you’ll need to do some evaluation before you put companies on your list. I’ve found that software review sites and blog posts often times contain defunct or unrelated companies, something you’ll need to manually check.


Marketing Technology Landscape 2019

Market Technology Landscapes

If you search for “[insert broad market] technology landscape”, you may find that others have already done the hard work of putting together a comprehensive market landscape for you. For example, searching for “marketing technology landscape” or “sales technology landscape” will literally give you an up-to-date map of the market.


Ahrefs competing domains screenshot

SEO Tools

On the off chance that you have a subscription to an SEO tool such as Moz, SpyFu, or Ahrefs, these can be great to dig up competitors. For example, on Ahrefs you can go to the “Site Explorer” and enter the domain of a company, and then go to “competing domains”, which will show the domains that compete for the same keywords. Most of these tools have similar capabilities and can uncover new competitors that the other methods haven’t uncovered.

Competitor Analysis

I usually start by putting all of the competitors that were found in the preliminary research in a spreadsheet and adding a couple columns for segmentation. What you choose for the segmentation columns depends on your goal with the research.

For me, my goal is to have a high-level understanding of the current state of the market, and then identify 1-2 competitors that can serve as inspiration for what I’m trying to build. Basically, companies that are small enough to learn from, but are growing fast enough to show success. So, what I segment by are:

  • Company size - The number of people working at a company can be a rough proxy for the amount of revenue they are making (although it can obviously be skewed for highly unprofitable businesses). Search the name of the business with the keyword “linkedin” to pull up the LinkedIn company page to find the number of employees.
  • Funding - The amount of funding a business has is a direct outcome of how much investors believe in the company. This number can be found by searching Crunchbase.
  • Year Founded - When the company was founded can show you market-level trends in market age. The oldest companies are usually the stalwarts that most enterprises use, and identifying and studying these can be useful when conducting product development interviews so you can go deeper into what is missing from these tools. This can also be found by searching Crunchbase.
  • Domain authority - Domain authority is a signal of how established a company is on search, which is a product of its investments in SEO combined with its age and reputation. If you already pay for an SEO tool like Ahrefs or Moz, then you can use that to find this number. Or use a free too like this domain authority checker

All of these signals are highly correlated but can signal unique strategies companies take to achieve their growth objectives. Sorting by one column and looking at the outliers in the others is a valuable technique.

For example, let’s take a look at a spreadsheet that I put together for the idea I’m working on now, an SEO experimentation platform:

SaaS Competitor Research

From this spreadsheet, a couple of categories of competitors emerge:

  • The Old Guard - (Conductor, Brightedge, SearchMetrics) - These are the platforms that are currently dominating the market. Most of the people you talk to in the market will be at least familiar with them, so it’s useful to study them so you can talk coherently about them when doing product interviews.
  • The New Guard - (Botify) - These companies are newer versions of the Old Guard and are fighting to replace them. How the New Guard attempts to differentiate themselves from the Old Guard can teach you what the trends in the market are.
  • Larger Upstarts - (Ryte, MarketMuse) - These are smaller companies that have been able to hit product market fit and are able to sustain themselves as a sustainable business.
  • Smaller Upstarts - (ContentKing, Clearscope, RankScience, ClickFlow) - These are companies who haven’t quite reached product-market fit but are exploring new ideas in the space.
  • Dead Companies - (not listed) - For any market, there will be many dead companies/projects that are non-players in the space. These can be identified by taking a look at their blog/social accounts and seeing if they’ve gone silent. These companies should be excluded from analysis as they do not add any insight and there are too many of them.

Getting Even More Company Details

Now that you have a shortlist of companies that you want to learn more about, what can you learn about them?

History

Is a The Internet Archive a great place to see how a company has evolved over time. Looking at older versions of a competitor’s homepage reveals how the market has evolved and different approaches they’ve tried in positioning their product. It can also indicate stagnation if they haven’t changed their pitch in a long time and others in the space are moving toward a new trend.

Organization Data

These are large amounts of organization data available beyond what was mentioned earlier, and here are some of the sources I check if I want to learn something more specific about a competitor:

  • Crunchbase - General purpose organization database that keeps track of funding events
  • LinkedIn - The best place for an up-to-date employee count
  • Angel.co - Most tech companies post their jobs on AngelList, so it can be a good place to check for how much a company is growing
  • Owler - Similar to Crunchbase, but with a great focus on competitive intelligence
  • DataFox - An Oracle enterprise sales tool that sits on top of a high-quality database of companies
  • Mattermark - Similar to DataFox but less enterprise
  • Slideshare - Good for finding pitch decks and product demos

Product Reviews

How happy are your competitor’s customers? Find out on product review sites like:

Marketing Traffic

Looking at where leads are coming from for your competitors can show you how the market prefers finding your type of product. The resource below breaks down the channels that are delivering the most traffic for any URL:

Tech Stack

I usually look at tools like Datanyze, Similartech, and Builtwith to help me understand the tech that other companies are using. Generally, the type of tech a company is using isn’t very important from a competitor analysis point of view, but my engineering-side is just curious ;)

Other Fun Resources

  • Quora - Searching for questions related to the competitor usually brings up answers written by marketers working at each of the companies in the space
  • YouTube or Vimeo - Product demos, explainer videos, Q&A’s with leadership, if a company’s active on their video channel, this can be a rich set of data to really dive into what’s top of mind for a company

SaaS Company Lifecycle

The SaaS Lifecycle

These categories reflect the lifecycle of SaaS companies as they age, and the different markets they target. The general trend is for companies to move upmarket as they take on more funding and need to maximize revenue. As they grow, they acquire other companies and turn their product into a suite of products. Along the way, they either become acquired, and the most successful IPO. However, companies can choose to take alternative paths, choosing to stay small and private, or continuing to focus on SMB’s as they grow.

Fake Demo Calls

Now, if you want to take it one step further, what you can do is to start taking demo calls with some of these companies so that you can see how they pitch you. Some people would say that this is taking it too far. Common startup advice is to disregard competitors and avoid being a copycat. In principle, I agree that obsessing over competitors can be a waste of time. But in practice, I’ve observed that most people using the advice as an excuse to not put the work into understanding the market.

And then there’s the moral argument: Is it wrong to lie? The answer to that question is beyond the scope of this post. However, I will say that doing fake demo calls is not uncommon in the industry.

To maximize the relevance of the call, the alias you use will need to be closely aligned with the customer persona that you will be targeting in your venture. That way, you can see how the sales team tailors the pitch of their product to your persona, which is one of the most important pieces of information you can learn from the call. Also, if you haven’t nailed down your persona yet, these calls can be useful for identifying the most profitable personas to target.

You’ll want to be prepared on these calls with the questions you want answered, which you can sprinkle in the conversation. For example:

  • What kind of customers usually find the most value from your product? Which ones don’t?” - This can be great for identifying a target persona
  • I’ve heard of X, Y, and Z as competitors in this space. Which ones do leads bring up the most and how does your product differentiate?” - This one can add to the list of competitors you’ve already compiled, identify the most serious competitors to focus research on, and bring up differentiators that might not be on the website
  • What new products or features is your company focused on rolling out in the near future?” - This reveals the direction the company is heading and can reveal market opportunities as well as general trends. For example, if a company is focused on enterprise features, they will probably start to reduce focus on their smaller customers, a potential opportunity.

Now it’s time to actually make the call. There are multiple ways of going about this step:

  • Delegating - This involves finding a someone in your network who would be willing to hop on a call with a salesperson and take notes. Trust is important here, you don’t want them to slip up and expose you or your company (although if you’re just starting out, it doesn’t mean much). As is basic familiarity with a software sales demo and the ability to record a screenshare (which can be surprisingly challenging in the 21st century).
  • Doing it yourself - If you are just starting out, you don’t need to create a new alias, but if you are already publicly in a competing organization you will need to. Creating an alias is somewhat time consuming but if you do it once you don’t need to do it again.

Once you have the the notes from the call, equally useful is finding a place to keep it all. It’s easy to spend all of your energy on doing the calls and then forget that you’ll want to reference the info months later.

Application of Analysis

Understanding the larger market in this way improves your understanding of how your product can fit and where the market opportunities lie. When doing product development interviews, it can be valuable to learn how each of these companies are performing in satisfying the user’s needs. Is there something that the larger upstarts are doing well that the old guard is not? What is the market’s perception of each of these tools, and why are they (or aren’t they) using them?

Being able to answer these questions will help you:

  • Improve your confidence in pursuing your existing idea
  • Find business opportunities in a specific market
  • Convince investors to fund the idea
  • Ask better questions in product development interviews
  • Position your product to potential customers
  • Know when and how to pivot to a different idea
  • Avoid bad ideas from turning into real work
  • Educate your team on where to focus efforts

On the final point, one of the greatest multipliers of competitive research is making it accessible and spreading the knowledge among your team (if you have one). Don’t give people an excuse to not educate themselves. Create summary videos with Loom and post them to your slack, put all of the competitor videos in your company wiki, organize sessions on how these learnings can be applied to different departments.

Having a team that’s well-versed in the market can make all the difference, and by putting the time into gathering the data, you make it that much easier for them to get there.