Market research
How do you assess competitive threats from adjacent categories versus direct competitors?
Judge the two on different clocks with different evidence. Direct rivals fight for the same budget now, so watch win rate and deal notes monthly.
Adjacent players threaten the budget line itself, so watch churn reasons, no-decision losses, and how many of your customers already use their product. Screen each adjacent player with two questions, whether it could solve your problem at modest effort and whether it already reaches your buyer.
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What the adjacent-threat question is probing
Most competitive programs track the rivals sales names in deals. The threats that reshape a category often come from somewhere else, such as a platform that adds your product as a feature or a free substitute that is good enough for most buyers. The point of asking is to hear whether you can see past your own category and still prioritize sensibly.
On the market expertise rubric, the Exceptional level asks you to predict competitive moves and position before they happen. Adjacent threats are where that skill shows. By the time an adjacent player becomes a direct rival, the good responses are gone.
Two kinds of threat, two kinds of evidence
| Dimension | Direct rivals | Adjacent players |
|---|---|---|
| What they fight for | The same budget line, this quarter | Whether the budget line exists at all |
| How they show up | Named in deals and comparison requests | As no decision, built in-house, or churn to a tool nobody on your team tracks |
| Signal to watch | Win rate, deal notes, head-to-head losses | Churn reasons, no-decision losses, and how many customers already use their product |
| Review rhythm | Monthly | Quarterly, with a yearly briefing for executives |
| Typical response | Battlecards, proof, pricing and packaging | Product and positioning choices, such as integrating with them or moving to ground they won’t follow |
Two screening questions for any adjacent player
Not every adjacent product is a threat. Two questions shorten the list quickly.
- Could your customers solve the problem with their product at modest effort? For many buyers, good enough and already paid for beats better and separate.
- Do they already reach your buyer? A platform your buyers open every day can put a new feature in front of them without a sales cycle.
A player that clears both deserves a quarterly review and a named owner. One that clears neither can wait until next year.
The analysis, spoken for a podcast hosting platform
“I’d put the two on different clocks. We host podcasts for independent creators, so our direct rivals are the other hosting companies, and I’d watch them monthly through signup share and switching reasons. The adjacent threat I’d worry about more is a large video platform that now lets creators upload podcasts for free. It clears both of my screening questions. Creators can use it with almost no effort, and most of our customers already post clips there. The trouble is that it won’t show up as a named competitor. It shows up as creators who cancel and say they’re “consolidating” or “taking a break.” So I’d add the video platform as an option in our cancellation survey, track what share of our creators publish full episodes there, and compare churn between creators who do and creators who don’t. If that gap widens two quarters in a row, I’d take a recommendation to leadership. It might be to integrate with the platform and position ourselves as the place to manage a show everywhere, before creators decide they don’t need us.”
The answer earns its score in the middle, where it explains how the adjacent threat hides in the data. Anyone can say adjacent threats matter. Naming the survey field that would reveal one is market expertise.
Conclusions that don’t follow from the churn data
- Adjacent means minor. Adjacent players move slowly and hit hard, because they compete for the budget line itself.
- Nobody names them in losses, so they aren’t a factor. They rarely get named. Look in no-decision losses, “built it ourselves,” and churn to free tools.
- They announced a feature, so they are coming for us. Platforms add features to keep users, often with no plan to compete seriously. Watch usage and investment before reacting.
- Track everyone equally. A list of twenty competitors watched at the same depth means none are watched well. Screen first.
Follow-ups on adjacent and direct threats
| Follow-up | The worry underneath | A strong reply |
|---|---|---|
| How do you spot an adjacent threat early? | Whether you have leading signals | Watch where your customers already spend time, and add those products as options in churn and discovery questions |
| Leadership only cares about direct rivals. How do you get attention? | Influence with evidence | Bring the churn or no-decision data that shows the adjacent player, with a small ask such as one quarterly review |
| Can you give an example of an adjacent threat that became direct? | Pattern recognition | Pick a case you know well and walk through the signals that showed up before the move, since the signals are what is being tested |
| What do you do when an adjacent player crosses over? | Response planning | Decide whether to compete, integrate, or move to ground they won’t follow, and say which evidence decides it |
More questions in this category
Frequently asked questions
- What counts as an adjacent competitor?
- A product from another category that can solve part of your customers’ problem, often as a feature inside a platform they already use. The test is what your customer would do without you. If the answer involves their product, it goes on the list.
- How do I track substitutes like spreadsheets or doing nothing?
- Ask in discovery and win-loss calls what buyers used before and what they would use without you. Add those options to loss reasons and cancellation surveys. The answers show the real alternative, which is often free.
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