More competition also creates a regression towards the mean. In other words, more product offerings are becoming similar—often with large overlaps between them.
It used to be the case that comprehensive feature sets allowed a company to build a dominant position using their product completeness as a moat.
While feature differentiation can help you stay ahead, it won’t play the same role in helping you get ahead—at least not as much as it used to. It doesn’t work that way anymore. There’s too much noise.
But here’s the good news: there’s a new game you can play.
The new game: Over/Under
These days, there are many examples of market winners that didn’t reach product-market fit with the most comprehensive product in their category. Instead, they created their own subcategory to dominate.
As we’ve established before, if you can build a strong beachhead within a niche, you can use that traction to expand to new markets later. So, how can you wedge your product into a new subcategory?
One way is to use the Over/Under positioning technique.
The goal is to find a portion of the market that is either overserviced or underserviced by incumbent products, then build your product, content, and positioning around that specific use case.
Canva is a prime example of a company that found an underserviced part of an overserviced market to subcategorize and dominate. In the past, design software has been restricted to users with specialized design skills and technical know-how that allowed them to operate complex tools.
But this left a big group of users unaddressed: those who didn't have the time or ability to learn the complicated industry-standard tools. Canva decided to give basic design capabilities to a market of non-designers with simple design needs.
