You Don't Get to Pick Your Competition

You Don't Get to Pick Your Competition

"Nobody else does what we do; we don’t really have competitors."

I would hear this regularly as a VC in startup pitches, which would raise a red flag. Usually espoused by nascent entrepreneurs, it was a tell that they hadn’t spent enough time on their GTM strategy to understand that it’s your customers who define the competition, not you.

It’s not just fledgling founders who can fall prey to this line of thinking. Not long after launching Hulu’s paid streaming service, a conversation about messaging among our team sparked a debate: should we consider Netflix as a competitor in our marketing strategy?

Many were adamant that Hulu Plus—the original name of the service—was completely different. After all, our streaming catalog mostly consisted of current-season TV shows! Netflix’s catalog was made up of movies and TV shows from prior seasons.

This was technically correct but, as with most thinking that happens inside a company, it turned out not to reflect the average consumer’s perspective.

Streaming was just starting to go mainstream. Smart TVs and DVD players were a new-ish category; AppleTV (the box) was only three years old.

User research we conducted revealed that consumers associated streaming with Netflix. Hooked by the ubiquitous DVD by mail offering over the previous two decades, many had started using the company’s streaming service launched in 2007.

To be successful, we had to internalize consumers’ mindset in order to make a compelling case for why they should subscribe to Hulu Plus instead of—or in addition to—Netflix. Promoting our differentiated content, along with other growth levers, enabled us to scale the business to more than 3 million subscribers over the next two years (Hulu now has approximately 50 million subscribers).

Understanding customers’ needs and how they’re solving for them is critical to informing what your product should consist of, as well as how to market and sell it effectively. A powerful tool for gaining these insights is the Jobs to be Done framework. If you’re building a product or trying to figure out how to scale your business, JTBD should be part of your process.