How to Compete With a Bigger SaaS Competitor

Competing head-on with a bigger SaaS on features or price is a losing game. They have more engineers, more budget, and more distribution. The data is clear: 90% of SaaS products that successfully compete with category leaders do it by owning a segment or workflow the leader doesn't prioritize - not by matching feature sets.

Why this happens

Large SaaS products optimize for the median customer across their entire user base. The median customer is never your customer. Every large product has blind spots - segments it underserves because they're not the median, workflows it ignores because they're edge cases for most users, price tiers it won't go below because the customer acquisition cost doesn't pencil out at that price point.

Your job isn't to build a better version of the big product. Your job is to find one of those blind spots and occupy it completely. When you do, you're not competing with the big player - you're filling a gap they created.

What to check first

Four diagnostic questions that surface your competitor's blind spots:

Which segment uses your competitor's product but complains about it most in public reviews - and what exactly do they complain about?
Which workflow does your competitor handle poorly because it's a secondary use case for their core audience?
Which price tier does your competitor ignore because the customer acquisition cost doesn't justify it at that price point?
Which integrations or platforms does your competitor not support because they're niche - but not niche for the segment you're targeting?

The answers to these questions are your opening. One clear answer is enough to build a positioning wedge around.

How to fix it

Position explicitly against your competitor's blind spot, not against their full product. The framing is specific: "For [segment] who are frustrated with [competitor's specific weakness], [product] does [specific thing] better."

That positioning does three things. It immediately qualifies your buyer - if they recognize the frustration, they're your customer. It implicitly disqualifies the competitor without an attack that makes you look insecure. And it gives you a story that scales through word of mouth, because the segment you're serving will tell others in the same segment.

The mistake founders make is trying to broaden this message too quickly. As soon as it's working in one segment, the temptation is to soften the positioning so it applies to more people. Resist this. The specificity is what makes it work.

Remove the guesswork

Knowing where your competitor is weak in theory is different from knowing which segment is most ready to switch. RightPositioning tests your positioning against synthetic buyer panels representing your target segments and shows you where you win versus competitors in the buyer's mind - before you invest in sales or marketing around a positioning that might not land.

See how RightPositioning works