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What really counts as a competitive advantage?

Discussion in 'General Entrepreneur Discussion' started by GoldMan79, Jul 10, 2018.

  1. GoldMan79
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    GoldMan79 New Contributor Read Millionaire Fastlane

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    Hello guys, just a kick intro, I'm a computer science engineer and I'm looking to start my own SaaS business, to do this I need to learn, I posted in another forum looking for someone that already found success in the SaaS business and is looking for a totally free developer to build his next SaaS in counterpart this person will teach me the inside of the SaaS industry.

    I found one person, with a small SaaS business generation $900 MRR (11 customers), this person wants to build a product that already exists and I'm ok with that. The problem is when I asked him about the competition we told me that the market is totally new, with only one competitor. That didn't sound right to me, so I did some digging, there is a lot of competitors out there, well established and he didn't know about them, he also didn't expose what he can give me in counterpart of my work, but that's a subject for later.

    When I started listing all those competitors to this person, he told me that we can do better than them, so I asked him what is our competitive advantage? He responded we can do better than them in term of features and pricing, do this two options count as a competitive advantage? Because both of them can easily be replicated, knowingly that the competitors out there already have features that I can't build for him in a short-term period and already generate revenue.
     
    Last edited: Jul 10, 2018
    Kak and Arun Siva like this.
  2. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    This guy doesn't know his competition, and doesn't know how to separate himself from them. His revenue is $10k/year. What can he really offer you? Doesn't seem like much.

    What counts as a competitive advantage varies by industry. If you are looking for an overarching philosophy, watch MJ's video/thread about productocracy.


    View: https://www.youtube.com/watch?v=LE4iUdRu8sw
     
  3. Kak
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    Kak Capitalist Swine Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Features might as long as they are great improvements and will disrupt the space... Pricing won’t hold up for very long.

    It looks like you need to do some more due diligence on the deal. That’s ok that every detail isn’t hammered out yet, but it damn sure should be by the time you start. Free? How does free work? Contingency? Stock?

    Honestly, he doesn’t sound like he has much to offer.
     
  4. Flybye
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    Flybye Bronze Contributor Speedway Pass

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    Features? Maybe. Pricing? Depends on the features. If you are offering more features for a smaller price, then sure. If you are offering the same set of features for less, customers start looking into the fine details of the features and overall serviceability. With a company I worked for, I was literally told by customers they are moving on to a more expensive service because they could no longer deal with our unexpected down times.

    Depending on the type of SaaS, you may also want to put emphasis on being able to customize to cater to each customer if possible or at least offer different options in a tiered type model.
     

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