If you’re blaming “the markets” or “macro” or “the downturn” for sluggish progress …
You positive higher a minimum of be rising as quick because the competitors
In any other case, it is you, not the markets
— Jason ✨Be Form✨ Lemkin (@jasonlk) June 20, 2023
There’s a metric the very high founders monitor quietly, however ruthlessly, that I discover different founders both don’t monitor, or form of disguise from. That’s % of marketshare. And importantly, if it’s rising, or shrinking.
Why does it matter? Effectively, your progress, or lack thereof, of market share is the #1 signal of potential decay in your product. And doubtlessly additionally, of the necessity to improve the workforce.
Take into consideration the fundamental math for a second:
- The #2-#5 gamers needs to be rising sooner on a share foundation than #1. You’re ranging from a smaller base, with a singular aggressive benefit of some kind. It’s a must to be rising sooner on a share foundation than they’re. They need to be including extra new bookings than you typically. However rising extra slowly.
- In a fast-growing market, it’s essential to not be quietly left behind simply by rising extra slowly. Should you received to, say, $10m ARR this 12 months, rising 70% … that’s fairly good, if not fairly world-class. But when your comparable competitors is rising 100% at $20m ARR, that’s an issue. It compounds. If that delta stays that approach for some time, you’ll fall additional and additional behind.
- In a slower-growing market, it’s essential to not let macro challenges be an excuse to fall behind. In case your progress has fallen from 100% to 50%, however the competitors continues to be rising 80% … the issue is you. Not simply the market.
And some associated factors:
- Evaluating your progress on to your opponents retains it trustworthy. Why are they rising sooner? You possibly can’t blame it on seasonality. Your opponents have the identical seasons. You possibly can’t blame it on market adjustments. Once more, they play in the identical market.
- It challenges you, in the precise approach, to keep away from complacency. All software program slowly however absolutely will get outdated. Competitors actually does make us stronger. And we are likely to suppose we’re higher positioned vs. the competitors than we actually are. Realizing your relative progress charges challenges you to do … higher. When it’s arduous sufficient simply to get the work completed you have already got to get completed.
Now, this isn’t to say you’ll be able to’t nonetheless have a fantastic end result rising extra slowly than the competitors. Just a few examples:
#1. $4B BigCommerce is rising extra slowly than its $140B larger rival, Shopify. That’s a giant, large hole. However BigCommerce continues to be value a really spectacular $4B. Extra right here.
#2. $4.5B DigitalOcean is rising extra slowly than its mega opponents Azure, AWS, and many others. But it surely’s nonetheless value billions, in a really massive market.
#3. $4B NewRelic is rising extra slowly than $27B Datadog, however once more nonetheless value billions.
You possibly can’t all the time develop sooner than your high rival. However you’ll be able to a minimum of be trustworthy about it, and a minimum of the co-founders can quietly personal this as a core KPI.
Observe it for actual. Even when simply hitting the core plan is sufficient for the remainder of the workforce.
And if nothing else, at every firm assembly and board assembly, provide you with a easy tracker. Are we gaining share versus the competitors — or not? Observe it over time, every time. (Sure, you’ll have to make some educated guesses and get some knowledge from uncommon sources. If nothing else, you’ll be able to fairly reliably monitor headcount progress on LinkedIn).
Particularly in a rising market, like most SaaS classes, you’ll be able to each develop and fall behind on the identical time.
As founders, it’s your job to see that, even when others can’t. And often, you’ll see it early sufficient there when there may be nonetheless a lot sufficient time to do one thing about it.