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Scott Mathson
Scott Mathson

Posted on • Originally published at on

Competition in SaaS doesn’t have to be cutthroat

Competition can be a very motivating aspect of life. Winning is instilled in us from a relatively young age in a lot of our societies. Yet tit for tat competition in interpersonal relationships or competing with black hat techniques in software doesn’t actually get a person or company to where they desire to be.

I’ve been very fortunate to have worked with a variety of software companies, both large and small, and with small and local businesses and individuals, alike. All of whom face this reality of competition within their respective markets.

How do we currently respond to competition or how should we be responding? How impacted are we by other’s actions? Are we being reactive or proactive?

A resounding theme amongst the companies and individuals that I personally admire most is that they are fully aware of their competition, yet they are not debilitated or broken by, nor are they retaliating when competitors swoop low, trying to battle with them.

Competition is particularly cut throat in the software industry (or software as a service (SaaS)), and this is not limited to being true amongst just large, public companies. Startups are trying to assert dominance and make their place known in the market, and it may even be more cut throat at that level.

Yet there’s another route, a better option.

Eugenio Pace, CEO and Co-founder of Auth0, often repeated a phrase internally to that growing team of 650 individuals at his identity and security scale-up. Paraphrased, it went something like this:

I’m not worrying about the competition. The advantage that we can bring to the market is in focusing on what we have control over and doubling down on that. Advancing our own product and offering with focus, developing solutions that best serve our customers, is how we’ll win.

Recently I was reminded of his mantra and this approach, after news broke that Auth0 had been acquired for $6.5 billion by their largest competitor Okta. Had these company’s leaders been focused on competing with each other via common tactics within the industry like paying to piggy-back on each other‘s trademarks and earned awareness or directly “talking shit”, for lack of a better term, on each other throughout their websites, or any other harsher forms of attacking each other, then this combining of forces would never have seen the light of day. Had they built a point of view of one another as being enemies versus potential partners, then this would have never happened.

Undoubtedly this type of deal isn’t happening very often (due to adopting “the enemy way”) and this combining of seemingly competitive forces has raised question from skeptics. Yet these leaders ultimately decided that their combining of each other’s parallel missions, products, and offerings - that their teaming up - would be the best way forward for the future of this space. They were selflessly thinking of their own teams, their financial backers, their customers - developers and businesses - and they were thinking of their customer’s customer.

Instead of acting selfishly, they put everyone who relies on them first.

It doesn’t stand to do anybody any favor to over-focus on what our competitors are doing. Keep up with them, be curious about their approach, yet stay true to your own mission, build your own unique product, and remain open-minded.

I personally have had plenty of competitiveness instilled in me from various mentors, coaches, managers, and in my own actions and ways of approaching things throughout the years. Yet I’m noticing that in my efforts to be more introspective, to be more aware of defensiveness, and in questioning a knee-jerk reaction, it’s made me be more thoughtful and act in ways that I can be more proud of.

I’ll likely always be researching competitors and admiring their different tactics and techniques, it’s part of what I do. Yet I’m focusing on opening my mind to a more curious, focused, and open approach. There’s this toxic “growth at all costs” approach within the industry that, upon studying, makes clear that it does no good for anyone involved in its ways.

Both prospective and active customers alike are sensitive to bullshit. So, in any effort to better your company’s metrics and success, consider how taking the route of practicing cut throat competitiveness, along with all of its BS, actually negatively affects growth. Consider how this tactic may be interpreted by a potentially loyal customer of your brand. Customers can, do, and will recognize these things.

SaaS doesn’t have to be so cut throat.

In running my own, small software product for the past couple of years (smart podcast linking service Plink), I’ve been taking this open-minded approach more often than not. I’m actually quite close and continue to have conversations with nearly all of my direct competitors. We’ve even explored potential collaboration and partnerships.

Now this isn’t to say that the times like that in 2019 when I’d learned that one of them had just raised millions of dollars in fundraising or more recently that one of them had been acquired by a larger company, didn’t affect me in an emotional way. But the way that I choose to respond to that is key. And I’m choosing to respond with congratulations versus envy. I’m more aware than ever that behind every company are passionate humans like you and me.

Perhaps you’ll try practicing growing your product and its mission without any hurtful and attacking tactics, the kinds that unfortunately run rampant in technology and the broader world. Perhaps you’ll listen to interviews and study leaders that have a humble versus arrogant nature. Take notice how these leader's drive, values, and focus are what makes their companies actually have a larger, more positive impact in the long run.

We can all learn from each other. We can all ensure that markets and industries move forward. And we can do our part to ensure that it’s done in a humane and thoughtful manner, together.

In economics, cut throat competition is also referred to as ruinous, excessive or unfettered competition. More generally, cut throat competition is also subsumed under the term "destructive competition". source

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