I've recently been reminded of the temptation to catch up to competitors in an all-out 'feature war'. The hypothesis is that "if we have feature x, y and z like competitor A does, their current customers will come flocking to us and we'll expand our market share", or "we're 1 feature away from making billions".
A quote that I often like to cast my mind back to is from the venerable Steve Jobs:
"Your customers don't care about you. They don't care about your product or service. They care about themselves, their dreams, their goals. Now, they will care much more if you help them reach their goals, and to do that, you must understand their goals, as well as their needs and deepest desires."
So the answer really comes down to whether your product can help customers achieve their dreams and goals in a much more effective, integrated and fun way. And not just in a 2x way but in a 10x way, since let's be honest, trying to get people to change the product they use or know of is like trying to drop a bad habit. Anyone who's tried to stop snacking on cookies, for the sake of getting through the work day, knows what I mean. I should know - I could ravage two packs of Maryland's in one sitting.
Now consider this. You're a new player in an existing market and you're trying to 10x what existing incumbents do, in an effort to entice customers away from them. What if the incumbent has been in the market for a decade or more? They've got time on their side. The only way you might be able to catch up with them is if you raise a shedload of capital and pour it into developing a 10x product at a blistering pace. But most times the incumbent will have access to as much capital, if not more. If they spot you trying to nip at their heels, they'll just keep developing their product and stay ahead of you. Seems like a waste of money to me.
Instead, the most-touted approach to entering a market is to avoid the catch-up game entirely. Take everything back to basics - what is the customer's goal or job-to-be-done? What do they struggle with when it comes to existing solutions? How do they define success? Based on this, identify what are the most impactful opportunities available to you. Teresa Torres' opportunity-solution-tree approach is brilliant for this.
Then, consider what current players in the market do well and not so well. Map them to the most impactful opportunities and consider where there may be glaring gaps in the market - something that customers put up with but desperately need solving. Lock onto that, narrow your aperture of focus, and attack that opportunity like a rabid dog (hopefully in a more graceful way). Become THE product to solve that opportunity.
This is often referred to as the 'thin edge of the wedge' strategy. It's a great way to enter a niche market, get traction with early-adopters, delight their socks off, then strategically expand to a wider market and its wider needs.
When doing this it's worth remembering that your competitors are not daft - depending on how established you already are, they'll likely see you coming. So a key consideration when identifying target opportunities and designing your product strategy is to ask yourself how defensible this strategy will be at the beginning. You don't want to be nipped in the bud. There may be opportunities which competitors simply cannot meet, whether it's due to brand, capability or some other reason. These opportunities are ripe for the picking.
Happy differentiating!