Want to know the best way to differentiate against competitors?

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If you want to differentiate, you need to understand where you are in the maturity curve of the broader product category.

In general, there are 3 types of differentiation:

1️⃣ Contextual Differentiation

→ in the early stages of a startup that is doing something new, there really aren't "competitors" in the traditional sense

→ your "competitors" are actually just the way people are doing things today

(i.e. their current "context")

→ taking Uber as an example, they first needed to differentiate against the ways people got around (i.e. cabs, limos, carpooling, and even biking)

2️⃣ Competitive Differentiation

→ as the product category starts to solidify, real competitors will enter the space

→ after a few years, dozens of ridesharing companies popped up on the scene trying to challenge Uber

→ in this stage, your "competitive differentiation" comes into play — people are hearing about new apps and trying them out, so it's crucial here to win on product differentiation (i.e. better features) and better distribution

3️⃣ Brand Differentiation

→ once the product category has reached full maturity, most (if not all) of the other competitors will have completely dropped out of the consideration sets of customers

→ the remaining companies compete with each other not necessarily on features, but now on the overall strength brand (i.e. which name do customers trust more?)

→ Uber and Lyft are the two main companies left in the space and both have very different approaches to brand (i.e. Uber seen as more professional and Lyft as more friendly)