How can startups compete in a crowded market?

SaaS markets converge quickly and products start to look the same…

💢 This makes it difficult to stand out.

Take the ABM Software category (image)…

As you can see, they all sound alike:

→ Same target markets (teams & personas)

→ Same promise (benefits)

→ Same product (features & capabilities)

🤔 So what can a startup do when entering an existing market space like ABM software?

❌ They can’t try and compete on distribution (too expensive)

So they really have 2 options:

1️⃣ Build a better product

(This is very difficult)

You are already several years behind, and your product would have to be 10x better on some meaningful criteria.

And even if you do build a better product…

You’ll struggle to compete with the existing competitor’s reach in the market.

2️⃣ Differentiate On Market

↳ (There are 2 levers to pull here)

🎯 Target Customer

→ Go after an underserved customer segment.

The key to this approach is finding an underserved segment that is likely to grow.

Look for trends in behavior or shifts in technology to identify the segment growth.

🚩 Core Problem

→ Pick a unique problem to solve that is being overlooked

Are there sub-problems that are being ignored by the incumbents?

These could be opportunities for a new player (you) to own.

But be careful, there might a reason that no one is solving these problems (customers might not care enough).

____

💭 A final thought on crowded markets

If you don’t see a window to go after a unique segment, solve an unsolved problem, or make a 10x better product…

⏰ You’re likely too late to the category.

If this is the case, it’s best to look forward.

💡 What new problems or opportunities arise now that the market has become established?

In the case of ABM software, these are the questions to consider:

→ How does the sales process change for reps and sales leaders w/ an account level focus?

→ What new tools will marketers need now that they have better account data?

→ How will customers react to being targeted more specifically?

→ How will AI adoption impact B2B selling?

👉 And these questions are not just for new entrants.

These incumbents should be thinking through these questions to identify their next phase of growth. (6sense, Demandbase, RollWorks, a division of NextRoll, Terminus)