“Competition is not only the basis of protection to the consumer, but is the incentive to progress.”
 - Herbert Hoover

Suppose you could create your dream product. A product that solves a real customer pain in an elegant way and in a domain you are knowledgeable and passionate about (sounds pretty good, huh?). Further suppose that I gave you one choice. You could have no competitors for your product. You could have free and open source alternatives to your product. You could have a fractured market with lots of small competitors, some with established products and others with new offerings. Or you could have one giant and dominate competitor, with an older, established product and 80% market share. Which market would you chose for your dream product?

Really think about that question for a bit. It’s not an easy question, there is no correct answer, and we all face a form of this question each time we consider creating a new product.

With the benefit of 20/20 hindsight, the answer to this question can seem obvious. “It’s 2007. Should you create a screen capture product when you’ll have to compete with the established Snapz Pro X and the free features of Mac OS X?” Luckily for us, the folks at Plasq answered yes, and so now we have Skitch. But without the benefit of hindsight, the only reasonable answer is that it depends. Depends on what? Happiness, joy, and love.

When it comes to things digital, we live in a land of plenty. There are plenty of competitors to whatever product you are going to create or there are plenty of alternatives to users attention if you hope to create a new category. These days it takes more than being an adequate solution to a real problem that people have and are willing to pay to solve. That’s certainly required, but it’s just not enough. You have to create happiness and joy in your users and they must love your product.

The guys at Less Everything created Less Accounting to compete with Intuit QuickBooks. In case you don’t know, QuickBooks is a market leader so established that many Accountants demand their customers use it and its product name has come to stand for the category as whole, like Kleenex or Coke. Are they crazy? Well, yes they are, but that’s not germane. In addition to being crazy they understand what it takes to compete. According to Allan Branch, “Established is one thing, but being a product people love is another. It’s hard to compete with a company when their users love them. Freshbooks is a good example of that. Competing with QuickBooks though is easy since no one really likes QuickBooks except QuickBooks Consultants.”

This is a great situation. A large user base that knows they need a solution and are demonstrably willing to spend money on it, but some significant portion are just not happy with what’s available. This is where you strike, where there is no love.

You may have been tempted to say, “I’d chose no competitors of course.” In fact, this is often the wrong answer. I’ve been down the path of creating a new software category and it is by far the hardest of the options. Allan Branch reminds us that, “First to market isn’t easy, especially if your concept is new.” However long you think it will take to raise awareness of what you are doing, multiply it by 5. However much you think users will realize they need this new thing, divide it by 5. Still not convinced? Listen to Keith Alperin of Helium Software talk about Mercury Mover on the Mac Software Business Podcast.

A very common question on the Mac Software Business mailing list is about competing with free and open source alternatives. Don’t fear free. The same test holds. Do the users of the free option love it? Do you love the free option? Are you a passionate user of the free product? If not, why? Are there others like you? Price point is just one small part of the overall make up of a competitor. There are many other factors to consider, and none of them are as important as determining how happy the users of the free product are.

Let’s take one more example. Microsoft Office. Office may seem to be a counter example to the love test. At the same time that Office is sometimes held up as the poster child of all that is wrong with software, and very few people would tell you that they love Office, there is also a conventional wisdom that you can’t compete with Office. Many competitive offerings backed by big software names, piles of venture capital, Apple’s brand mystique or open and free have tried only to fail completely or languish in single digit market share. Has the love test failed? Is it not possible to compete with Office despite the fact that users don’t love it? It is true that OpenOffice and iWork will never supplant Office, but that’s because users don’t love monolithic desktop office suites.

What is a better way to compete with Office? Am I writing this in Word? No, I’m using WriteRoom because I love the simplicity of plain text files and green on black text on an empty screen. Have to use Office so you can share files with your colleagues? More and more people are collaborating on Google Docs in real-time instead. Do script writers love Word? No, and they now have a choice of tools specifically designed for writing scripts.

Conventional wisdom is wrong. You can compete with Office. You can compete because Office users don’t love it. You just can’t compete with an alternative that they also can’t love, another monolithic desktop office suite. Give your users something they love and you’ll beat the competition every time.

Sean Johnson is a seasoned product designer and developer and the President of Snooty Monkey, LLC, a Mac and iPhone development consultancy and the creators of BubbleTimer. If you’d like to consider Snooty Monkey for development work, please contact Sean at sean at snootymonkey dot com.