A Different Way to Think About Your Online Competition

The Transcript

A Different Way To Think About Your Online Competition

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You are listening to The Digital Entrepreneur. The show for folks who want to discover smarter ways to create and sell profitable digital goods and services. This podcast is a production of Digital Commerce Institute, the place to be for digital entrepreneurs. For more information go to Rainmaker.FM/DigitalCommerce. That’s Rainmaker.FM/DigitalCommerce.

Sean Jackson: Welcome to The Digital Entrepreneur, everyone. I am your host, Sean Jackson. I’m joined, as always, by the eclectic Jessica Frick. Jessica, how the Frick are you today?

Jessica Frick: I am eclectic, Sean. How the Jackson are you?

Sean Jackson: Very good. I got a new thesaurus, so I’m going to try new names.

Jessica Frick: Oh boy.

Sean Jackson: Oh boy.

Jessica Frick: Oh boy, it’s on now.

Sean Jackson: We left last week’s episode with the question of the week, which is this: How much is too much competitive research? Obviously you’re going to do some of it if you’re an online entrepreneur, but how much is too much? Jess, what do you say? Should you do a lot of it, a little of it, or none at all? What do you say?

Jessica Frick: I think you need to do a lot of it. Obviously you can’t focus all of your attention on it, but I don’t think you should ever really take your eye off of the game.

Sean Jackson: Yeah, I understand that. But here’s the thing though — if you’re a small business guy or gal, your time is probably the most valuable asset that you have, and you never have enough of it. There’s only 24 hours in the day, that’s it. If you are spending too much time worrying or looking at what other people do, don’t you think there’s a tendency to start to morph into meeting what your competition is doing and not trying to concentrate on your unique proposition by yourself?

Jessica Frick: Well, I can see how being untainted with your view of your product could certainly help you be unique. But if you don’t know what’s in the market and perhaps what’s failed or why, or what the market even is asking for, how could you possibly know whether a) you’re unique, and b) whether you’ve really got something you want to put your weight behind?

A New Way of Thinking About Competition

Sean Jackson: Yeah. Maybe it’s a matter of semantics. Competitive research, to me, implies this concept of, “I have a competitor out there. I’m going to be watching them diligently and I’m going to be meeting them step by step by step.” As opposed to — and I’ll throw out a new idea — alternative research. We have alternative facts. If we have alternative facts, we can have alternative research, right?

Jessica Frick: Oh boy. Oh Jeez. Okay, so what is alternative research, Sean?

Sean Jackson: Alternative research is this concept of, “What are the alternatives to my product or service that are available out there?” Not, “Who is my competition?” per se, but, “What are the alternatives that I’m competing against?” Maybe people are using a very simple Excel spreadsheet to do their job. That’s an alternative to what you’re doing, that’s not a competitor. You’re not going to compete against Microsoft, for goodness sakes, but it is an alternative to what is out there.

So maybe, as part of your normal work week, thinking about what are the alternatives that people are turning to, and then looking at that as a way to understand your audience better. While at the same time realizing that those alternatives have competing factors that you may be able to address. What do you think of that?

Jessica Frick: I think that’s really smart. I think the message here is, “Don’t try to keep up with the Jones’, but know why you’re better than the Jones’.”

Sean Jackson: Don’t ignore them either. That’s right. I think that comes down to it. I look at competitive research, and I’ve seen companies that have actually gotten so fixated on it that they’re trying to match feature for feature, or they’re trying to play … They get pulled off of their messaging and start to morph into their competition’s messaging, which pretty much makes them indifferent — not indifferent, what is it?

Jessica Frick: Yeah.

Sean Jackson: Non-differential in the marketplace.

Jessica Frick: Yep. Master of none.

Sean Jackson: Yeah, exactly. So I think there’s a balance. But I do think you are correct. You need to be keenly aware of the ecosystem. What is happening there? What is going on? What are people looking at doing? That could be a direct competitor — a product or service that is literally targeting you — or it could be, “Hey, people are figuring out some other way to accomplish what they want.” That’s the alternative that they are using. Knowing that may make your product better if you can make that alternative not so attractive.

Jessica Frick: I think that — what you just said — is airtight. I got nothing.

Sean Jackson: Oh wow. I finally got one right? Oh my gosh, Jess. It only took us so many episodes for me to be right about something. Holy cow! I feel so special.

Jessica Frick: Yeah. Nailed it.

Sean Jackson: So, now that I’ve won one, Jess. Let’s do this. Let’s talk about who we have on the show today. Because we have a very special guest coming up in the next segment.
Who is that, Jess?

Jessica Frick: We have Jon Henshaw from Raven Tools and now TapClicks.

Sean Jackson: Exactly, and Jon, I think, understands this idea of competitive research. He created up a product that was a leader in its space. Where many people came in and copied him, etc. He has gone through the trials and tribulations of being the only person, to having tons of people — what that did to his business, where it led him, and what he learned from it.

When we get back from the break, Jess and I are going to be interviewing Jon Henshaw from Raven Tools — a very close friend of ours — about how he thought — and thinks — about competitive research in the technology space. You won’t want to miss this, so stay tuned.

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Sean Jackson: Welcome back from the break, everyone. Jessica, we have on today’s show, a good friend to both of us, actually, our good buddy, Jon Henshaw. Will you please introduce Jon Henshaw, The Awesome One, to our amazing audience?

Jessica Frick: The Awesome One, and of course the All-American water polo player.

Sean Jackson: Oh, good one.

Jessica Frick: I know, but I do have a much better intro. Jon is the director of digital marketing and product evangelist for TapClicks and Raven Tools. Big news there, TapClicks and Raven Tools. He is the co-founder of Raven Internet Marketing Tools, an online marketing management and reporting platform that was recently acquired by TapClicks. He has lived all over the world, and is most certainly a subject-matter expert and one heck of an awesome guy. Jon Henshaw.

Jon Henshaw: Awww. That’s the greatest intro I think I’ve ever had. I want you to introduce me as “The Awesome One” to my kids. I want to see how they react.

Sean Jackson: More importantly, to his wife actually. She wouldn’t even know who that is.

Jon Henshaw: Right. She’d be like, “What? Who are you and why are you saying that?”

Sean Jackson: Hey, Jon, thank you. Thank you for being on the show, man. Really appreciate it.

Jon Henshaw: Thanks for having me.

Why Being One of the First in a Market Can Be a Challenge

Sean Jackson: So let’s get into this, Jon. Your story is fascinating to me, insofar as what you did with Raven. I got into SEO back around 2006ish, 2007, and Raven was at all of these SEO conferences that I kept attending. It was great because Raven was the only person there with a suite of tools that were designed for the SEO space at the time. Your story is fairly interesting. While you were the first ones, you weren’t the only one. Tell us a little bit about how that was — to be one of the first out of the gate — and the metamorphosis that occurred over the years.

Jon Henshaw: Well, it’s interesting, because being first out of the gate is both a blessing and a curse. It’s the type of thing where you’re definitely getting attention for what you’re doing, because you essentially were in a position of innovating. If nobody’s done it before, you’re basically innovating. You are creating something that nobody has yet.

At the same time, when you’re the first person doing it, it’s not exactly the best. It’s just the best we had at the time. When we first launched it, it was not good, and people told us. We actually took it into a private beta after that. The reason why was because we had some big agencies both in the U.S. and the UK. They saw what we were doing. They needed it, and they didn’t want to build it themselves because it was complex, what we were doing. They were basically like, “If you will work with us, we will help you in what we need,” as far as … We had a few problems we still weren’t solving for them, so they worked with us to help them solve those problems.

After about six to nine months, we re-launched it and that ended up being successful. That’s even a good piece of information for anybody trying to enter a space and to do something where maybe there isn’t a solution there yet. That is, you’re going to get the best product when you work really closely with the people who need that product. That was really what set us on a good foot and made us, I would say, successful — particularly for the first several years.

Sean Jackson: Right. I think that’s an interesting part and a good story. You were coming into the SEO space when it still had a big black hat or black box mystique around it. It was this very unique art form, etc. You were one of the first people to put all of these tools into a suite that people could use to manage their online marketing, specifically in the search marketing space. But there was a downside to all this, Jon. Because you were the first one, you had to focus and make it better. Then you released it out there and everybody starts saying, “Wow. Raven Tools, Raven Tools, Raven Tools,” But then something happened along the way, which is …

Jon Henshaw: Competition.

Sean Jackson: Exactly. Which is the whole point of today’s show.

Jon Henshaw: Was I supposed to answer that?

Sean Jackson: Yes, you were. You did. That had to drive you crazy. Here you are, small guys in Tennessee coming out with this tool, and everyone’s finally raving about Raven Tools. You got it working, and then every day it seems like there’s somebody new. Talk about that.

Jon Henshaw: Well, it was interesting at first. When it’s such a small field of players everybody knows about each other. Back then, we would really know about our competitors because there weren’t that many people to look for or look at. On top of that, if you’re very competitive, like I am, you’re always going, “What are they doing?” and trying to second guess what their next move’s going to be. “What do they mean by that particular blog or press release?” That type of thing. You drive yourself crazy.

That is okay, particularly when it’s a small field and everybody’s innovating, because it keeps you innovating at a very quick pace. The same is true for them. What you do, then they’ll do, and then the other person will do something. But I would say, as the market matures in that area and you start to get more people, it’s not really sustainable. As you start to expand what you do …

In other words, if you’re constantly innovating, then you’re most likely making new tools and new features, then another tool, and then a new feature — which was generally the case with us and especially those early competitors. Then you get to a point where you can’t live like that. I think for us, we started to want to make our own path and have our own vision. I remember where we started with SEO. I had this vision of, “Oh, I want to be more than SEO now,” There was a whole, “We could go way down this path, and we can do social and we could do paid,” that type of thing. The other people we were competing with earlier on started to go down another path, and that seemed like a really good idea at the time.

It seemed like that would help us remain competitive and make us unique and different, but something along the way happened that I didn’t see coming — some of this is from lack of experience — that was the bigger you want to get and the more that you want to do, it opens up opportunities for new competitors to come in and take a piece of your pie. What I saw that started to happen was — there were people who would go, “You know what? That’s a really awesome tool that they’re doing over there. I see they’re making money off of that. We’d like to make some money off that too.”

Sean Jackson: Yeah.

Jon Henshaw: I think the very first one where people started coming in was with the rank tracking. Nobody was doing it. We were one of the very first people — we may have been the first person, or first company to do a web SaaS-based model of rank tracking. I think before us there was WebCEO, but that was all desktop-based. You ran it off your computer.

I think we were one of the first ones to actually, back then, do the scraping and then get the data as a web service. A lot of people started seeing that and entering that space. Before you knew it — I would look around and it was, “There are five companies doing this now, there are 10 companies, there are 20 companies.” It was insane. It seemed like practically every week there would be a new company that’s like, “We do rank tracking. We do it better than Raven. We do it better than — ” maybe some other competitor that started to become more well known. It gets kind of crazy.

Of course, we’re off trying to do all these different things. I guess what happened was … They have an advantage that you don’t have if you start building your product more diverse, bigger, and with more tools than maybe it needs to have, and that is that they are focusing on that one thing to try and make that better than you. That’s their core focus and that’s their only focus. It is easy to not be able to compete as well as you go forward if you’re focused on too many things.

Sean Jackson: Right.

Jon Henshaw: It’s easy for them to actually come in and take market share if they’re only focused on that one thing. So that was something that we definitely experienced around at least the ranking and a few other areas that we added to our platform.

How to Respond to Knock-off Products

Sean Jackson: But how do you handle this? What is the recommendation that you have to handle this going forward? Here you are, you’re creating up something new in a space. You’re getting attention. You start to make some money. You decide that you can do so much more and you start branching off. All these people come, chipping away. How do you handle that? How do you recommend people look at that? Inevitably, if you have any type of success online, this model will be something that happens to you. How do you recommend people should handle this?

Jon Henshaw: I can tell you how we did handle it, but I’m not sure that’s the right way to handle it. A lot of it depends on your resources. I think the trouble we got into was that I in particular had a very ambitious vision for what I wanted the product to be, but at the same time my business partners and I wanted to remain bootstrapped. We were prideful and liked the ability to retain control and make decisions on our own and to not have to be able to deal with a demand from a banker or something like that. We liked that level of control, yet we wanted to build this gigantic thing. Looking back on it, that’s really hard to pull off. I think very few people pull it off.

If we had gone originally the VC route and we actually had a lot of money and we could spend it on a lot of resources, I think it may have worked out a lot better than I thought it would have — or did, that is. In that case it might work out. But if you’re asking me, “What have I learned?” Looking back, I would not have tried to build so many different things — especially tools and resources — that were very different from each other.

The reason why is because a lot of the things that we were known for early on ended up being chipped away and taken, from those other companies who were only focusing on those core tools. Whereas we were trying to do all these other things. I would even say that is what led us to why people use Raven today the most, and why we were even of interest to TapClicks to acquire us, which is, at the end of the day we were able to sustain the best link management and link building tool out there.

We had it at the time, but we had people like BuzzStream come along and because they were micro — just totally focused on it — they were able to just innovate and make a better version of that than what we had originally done. What we were able to do is the reporting. Because we had become so diverse and made tools all around this, it enabled us to connect to a ton of data connections, so we evolved into a marketing report platform almost unbeknownst to us. Originally it was all about management tools and outreach, that type of thing. When it was all said and done, we ended up becoming more of this analysis and reporting tool set. We allowed these other people to come in and grab market share on the smaller areas.

Sean Jackson: Gotcha. Let’s talk about how you factor in the competitive side for our audience to think about it. In other words, you were doing a lot of innovation, but it wasn’t necessarily driven in response to your competition. It was more driven into the view that you had in this world. “I want to achieve this. I want to create this. I have the resources to do it, hence I’m going to go do it.”

But when you started to see that competition, how did you respond to it? There is a psychological aspect when you saw some people that were innovating on tools that you had literally created up and were basically drawing away. What would you suggest our audience think about that? How to respond to that competition, if you will?

Jon Henshaw: You obsess over it. If you are a person who it’s your company and it’s your thing, or you’re the product person, it’s really difficult to not obsess over it. So you definitely obsess over it. If anybody out there is like, “Yeah, I obsess over it,” then you’re normal. If you’re not obsessing over it, you’re not normal. You should probably be doing something else.

So you obsess over it, but the most practical way to approach it is don’t freak out, just look at what is it they’re doing that you can do and what is it that they’re not doing that you could do. That’s generally how I would approach it. I would go, “Okay, that’s really cool, what you did. I don’t like it because that’ll probably appeal to my prospective customer, but now let me think of what’s the thing that I can usurp that with? What is the thing that I think is next? What is something that is current that I think would be incredibly useful to our customers and potential customers. Something that would be very marketable.” That’s what we would do.

That would be my advice to anybody out there if they’re sitting there like, “Okay, here’s my product. I already have my road map. I’m happy with where we’re going, but now this competitor over here has come in and they’ve released this really cool feature and I don’t have that.” Then I think the approach is basically, “One, can you add that and can you do it quickly? Then two, can you make it better?” Then the third part being, “Is there something they don’t even have that’s not even related to that, that if you added would make you look even better than them?” That’s generally how we’ve approached it in the past and that is how I approach things today.

The Best Way to Make Sure Your Online Efforts Don’t Get Derailed

Jessica Frick: Obviously you’re a data guy, big into analysis. Is analysis paralysis even real for digital entrepreneurs? Can you go too far? And if you do, how do you know that you’re there?

Jon Henshaw: As far as data goes, data’s important to me, but I’m more interested in the result of that data. I want to know, “What did you find?” A lot of times people can get stuck in looking at the data constantly, even thinking, “I don’t have enough data.” The truth is that you’re never going to have enough data.

The other problem with obsessing over data is that you can never come to conclusions sometimes. In other words, we did a bunch of research around different areas, and when we looked at it we were like, “I have no conclusion. I’m not even sure what to do here. The data’s all over the place.” It’s so difficult to get to that. So instead of getting mired down in data — especially if that data doesn’t have a clear direction or solution — what we would do in those situations is … Just talk to your customers.

It’s literally almost from a UX perspective. How they do those type of interviews and things. Talk to your existing customers. Talk to the people who are loyal to you. Talk to the people who will be honest with you. Talk to the people who have left, if they will give you the time of day. Find out what it is that was keeping them there, why they were drawn toward it, why they left, or why they went to that competitor.

That’s the type of research that, I think, ends up giving you the most insights. Especially when it’s person to person, not some survey. Literally spending time with them on the phone or in real life and getting an idea of what’s really going on there. Then as you start to collect that — you don’t have to interview 100 people or 1,000 people. Typically, in the past for us, once we’ve talked to about 10 or 15 people we had a pretty good idea of what was going on around a certain area.

From there you can use both data and your gut to make better product decisions and maybe pivot or change some of your roadmap to take care of some of the issues that you found after talking with them. Those things will present themselves. They’ll start to become obvious. I think the problem that people get into is when they stay at one of those extremes, meaning that you’re almost always going to make bad decisions and get in trouble if you are only following your gut, and you’re almost always going to miss something or go the wrong direction if you’re only looking at data.

To find that happy medium, to not do things based on a giant committee but have a couple decision-makers … “You guys make the decision and just do it.” It’s either going to work or it’s not. That combination of: get enough data that’s actual hard data, that’s quantitative, but then get that qualitative part. Then you just have to make a decision from there and hope it’s the right decision.

Sean Jackson: Jon, I want to follow up on that. I’m going to tell you, as someone listening to this, I would be thinking, “This is all great information, except for what you just said.” Which I 100 percent agree with, which is, “Talk to the customer.” Literally talk to the customer. But here’s something that can happen. The customer, especially if they are someone who switched to the competition, may call your baby ugly. Not your physical baby, but the baby that you put blood, sweat, and tears in. Months and years of building up and seeing your competitors attack.

Talking to someone who’s left … How do you get over that? There’s no question that Raven Tools — the passion and soul that you and Scott brought to this was huge. You can see it manifested in the product. And then to talk to someone who’s left you has got to be gut wrenching. Someone who you’re talking to and they may not even get it. Or they may be paying you, but they’re not really happy about it, they just were told to do it. How do you get over that psychology of having someone tell you the truth?

Jon Henshaw: By me not talking to them. That’s really what it comes down to, seriously. The amount of confirmation bias that I bring to something — I don’t think I’ve ever done a survey where my bias wasn’t all over it based on either what I wanted the answer to be or what I was interested in. Probably the only way to go about doing this is to make sure that a founder — or somebody who’s a stakeholder in the sense of stock and financial interest and that type of thing — is not doing the actual asking, is not doing the interviewing.

You always want to try to find somebody who has the least stake into it, in that sense, to be the person who does the interviewing, who does the questioning, or that works with the data. That’s your best chance of it not being tainted. If you’re a co-founder, or if you’re somebody who’s in that decision-making place and you still can’t deal with that data, well you have your own personal problems. You’re going to have to deal with that yourself.

In other words, part of being a leader and making good decisions is that you can handle things that you don’t like and information you don’t like, and you can make good decisions based on that. The best decisions we’ve ever made with a product have always been either having a third party or somebody who is truly impartial do the questioning and gathering that information, running the analysis and creating those insights, and then presenting that to us so we can make good decisions.

Sean Jackson: You know what, Jon? I loved how you ended this interview, and I think you’re 100 percent spot on.

Jon Henshaw: Wait, it’s over?

Sean Jackson: Yes. I cannot thank you enough for being on our show today and truly sharing both your insight — which was a hard learn, to put it mildly, over many years. Again, congratulations on your new role with TapClick. We truly appreciate you and everything you do for us.

Jon Henshaw: Thank you, and I have to say — you said it earlier, but both of you are wonderful friends. I’ve known you for a long time, and I really look forward to seeing you soon, hopefully at State of Search or something like that.

Sean Jackson: There we go. Jon Henshaw, everybody. We’re going to be right back after this short break.

Hey, everyone, this is Sean Jackson, the host of The Digital Entrepreneur. I want to ask you a simple question. What is your business framework for selling digital goods online? Now, if the question perplexes you, don’t worry, you’re not alone. Most people don’t realize that the most successful digital entrepreneurs have a framework, or a general process for creating and selling their digital goods in the online space.

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Welcome back from the break, everyone. It’s the time of the show where we give our recommendations for the week. Jess, let me guess what you’re going to say. I think you, being the nice sweet person that you are, are probably going to say that people should be looking at …

Jessica Frick: What’s your guess?

Sean Jackson: Um … Raven Tools?

Jessica Frick: Yes, that is my tool to recommend. When I worked with Rainmaker I used Raven all the time. Now that I’m working with PushFire, obviously we are huge fans of Raven Tools and also TapClicks. The difference here — I think for those who are listening to this show, you’re probably not enterprise level just yet. You may be running an agency, in which case TapClicks is a fantastic option for you and your client reporting. If you need just the essentials — bringing everything together, helping you do a comprehensive overview of everything that you should be knowing as far as the digital landscape is concerned with your business — Raven Tools has what you need.

Sean Jackson: This is not a sales pitch. This is a recommendation. I would concur with your recommendation, but not in such a sales-y way. Mine is actually something that Jon told us that he likes to use. When he’s doing competitive research he actually likes to use SimilarWeb, which is kind of interesting. It is a service site I hadn’t really learned or heard a lot about. He’s definitely a big fan of SimilarWeb. I’ve used it. It’s a good way to get sites and categories in some sort of order and listing. Then on the SEO side, they use — at Raven Tools — all of the different SEO services out there. Right, Jess? They are very comprehensive in what they do.

Jessica Frick: Absolutely.

Sean Jackson: The one that he tends to turn to though is Majestic. Even though Moz is fantastic, Ahrefs, etc. All of them have their strengths and weaknesses. Majestic has been a tool, from the SEO perspective — looking at the backlink structure, looking at some of the SEO details that are somewhat technical, to be fair. He tends to lean towards Majestic.

So that’ll be my recommendation. Using SimilarWeb to look at sites and categories and rankings they’re in, and then, of course, conversely looking at Majestic for the SEO aspect of your site at a fairly detailed level. You’ve used Majestic. It’s a phenomenal tool, like all of them, but it can be very detailed, which is why Raven makes it so nice. At the same token, those are the two that I recommend. We’ve got Raven, TapClicks, SimilarWeb and, of course, Majestic as our recommendations of the week. Jess, ready for the question that we want to leave everyone pondering as we conclude this episode?

Jessica Frick: I’m ready.

Sean Jackson: Should you, as a digital entrepreneur, write a book?

Jessica Frick: No.

Sean Jackson: No? What?

Jessica Frick: You can, but you don’t need to.

Sean Jackson: Ah. Well, that’s a good point. Maybe you don’t need to.

Jessica Frick: I feel like everybody’s saying, “You have to.” I’m going to guess you’re going to say you do.

Sean Jackson: Well of course I’m going to say you do. I think if you’re going to be in the online space and if you really want to stand out … You remember how we were talking about how weird do you need to be or how unique and remarkable you need to be? I think a book puts a big value on there. I call it the $15 business card. Trust me, you go into any meeting and you put that down — no one’s going to read the thing — boy, you become an instant authority just because you have a paperback volume with your name on it.

Jessica Frick: I think we should discuss this more at length.

Sean Jackson: I think it is deserving of a deeper conversation, which we will do on the next episode of The Digital Entrepreneur. Everyone, have a great week.

Jessica Frick: Thanks for listening.