The Competitor You Don’t See Until It’s Too Late
“A frog’s brain is set up to recognise food as moving objects that are oblong in shape. So if we take a frog’s normal food — flies — paralyse them with a little chloroform and put them in front of the frog, it will not notice them or try to eat them.
It will starve in front of its food! But if we throw little rectangular pieces of cardboard at the frog, it will eat them until it is stuffed! The frog only sees a little of the world we see, but it still thinks it perceives the whole world.
Now, of course, we are not like frogs! Or are we?”
Alan Kay
Many people think they understand their competition. Even more realise they don’t. They’re like frogs staring at paralysed flies while eating cardboard. Competitive intelligence can reveal the gap between what you think you see and what’s actually there.
A project management software company lost 40% of its mid-market customer base over 18 months. “We didn’t lose to competitors. We lost to… nothing. Customers just churned. The customers just said they didn’t need project management software anymore.”
The question was “What are those customers using instead?”
“We don’t know. They said they’re handling projects differently now.”
They interviewed fifteen churned customers. Every single one had the same story:
They weren’t using project management software anymore. They’d moved how they worked to Notion, Airtable, or Coda. They had never considered competitors because “those aren’t project management platforms.”
They had been tracking Asana, Monday.com, ClickUp, and Wrike. Classic project management competitors. They watched feature releases, pricing changes, and market placement obsessively.
At the same time, flexible database tools were taking over their market from a different category. They didn’t offer better project management features, but let teams create the workflows they really needed.
The threat was right in front of them. They missed it because they only saw “competitors” as other project management software.
They acted like the frog. Notion was the paralysed fly. Monday was the cardboard they kept choosing.
Why We Only See What We’re Programmed to See
Alan Kay’s frog story shows something important about perception: we don’t see reality itself. We see patterns we’ve learned to recognise.
A frog’s brain recognises “food” as “oblong + moving.” Paralysed flies are food, but the frog can’t see them because they’re not moving. Rectangular cardboard isn’t food, but the frog eats it because it moves and has the right shape.
The frog isn’t stupid. Its instincts work well in its usual environment, but when things change, those instincts can fail.
Companies make the same mistake with competitive intelligence.
Your brain is trained to recognise “competitors” based on patterns:
- Companies in the same category
- Companies with similar products
- Those targeting similar customers
- Companies you see in deals regularly
These patterns work. Until they don’t.
The real threats are often like paralysed flies: easy to spot in hindsight, but invisible in the moment because they don’t fit your usual patterns.
The Patterns That Blind You
At Octopus Intelligence, one of the most valuable services we provide isn’t showing clients what their competitors are doing. It’s showing them what they’re not seeing because their pattern recognition is broken.
Here are the blindness patterns we see most often:
Pattern 1: Category Blindness
You define competitors as “companies in our category.” This gives you a blind spot to threats from adjacent categories that solve the same customer problems in different ways.
Blockbuster defined competitors as “other video rental chains.” They tracked Hollywood Video obsessively. Meanwhile, Netflix, a DVD-by-mail service in a completely different category, destroyed them.
Hotels defined competitors as “other hotels.” They tracked Hilton, Marriott, and Hyatt. Meanwhile, Airbnb, a peer-to-peer rental platform in a completely different category, took billions in market share.
How you define your category is like a filter. It helps you see some threats but makes others completely invisible.
Pattern 2: Feature Blindness
You define competitors as “companies with similar features.” This blinds you to competitors solving problems through entirely different approaches.
Simply, taxi companies defined competitors as “other taxi companies.” They followed things like fleet size and dispatch efficiency. But Uber, connecting riders and drivers, made the taxi infrastructure irrelevant.
In the collaboration software SaaS firms used, Kinsey and Co defined their competitors as “other collaboration tools.” They tracked Slack, Teams, and Discord. Then Notion absorbed collaboration use cases without framing itself as collaboration software.
If you only track features, you may miss those new business models.
Pattern 3: Customer Segment Blindness
You define competitors as “companies serving our customer segment.” This blinds you to competitors entering from above or below.
Enterprise software companies track other enterprise vendors. They miss SMB tools that are good enough for enterprise use cases at 1/10 the price.
Consumer app companies track other consumer apps. They miss enterprise tools that are launching simpler consumer versions.
If you focus only on your segment, you get tunnel vision. You see competitors in your space but miss those coming from other directions.
Pattern 4: Geographic Blindness
You define competitors as “companies in our market.” This blinds you to international competitors preparing to enter or already entering quietly.
US companies often track their US competitors. They miss Chinese companies building similar products at lower costs, preparing for Western expansion. It’s too difficult to track Chinese companies is something we hear often.
European companies track European competitors. They miss US companies with more capital and faster growth rates, planning European entry.
MENA companies track regional competitors. They miss both Western companies entering and Chinese companies building parallel infrastructure.
Geographic boundaries aren’t real barriers. Markets are global, whether you notice or not.
Pattern 5: Business Model Blindness
You define competitors as “companies with similar business models.” This blinds you to different monetisation approaches for the same customer problems.
Paid software companies track other paid software. They miss open-source projects that build communities that become commercial threats.
Subscription companies track other subscription businesses. They miss out on usage-based pricing models that better correspond to customer value.
Service companies track other service firms. They miss productized service models that scale differently.
If you think your revenue model defines you, you’ll miss threats from companies that make money in different ways.
The Competitive Intelligence You’re Not Gathering
Most competitive intelligence programs have built-in blind spots. It’s not that they’re done badly, but they’re set up to spot the obvious and miss the hidden threats.
Standard competitive intelligence tracks:
- Direct competitors’ product releases
- Pricing changes from known competitors, but only from what they publish on their website
- Marketing campaigns from recognised competitors
- Executive moves at established players
This information is useful, but it’s incomplete . And that can be risky.
Here’s what you’re probably not tracking:
Adjacent Category Movement
Which companies in related categories are expanding into your space? Which customer problems are they solving that overlap with yours?
We track tools like Notion, Airtable, and Coda for project management clients even though they’re not “project management software.” We track design tools for collaboration software clients. We track data platforms for analytics software clients.
These threats don’t call themselves competitors. They show up in your customers’ workflows, solving problems you thought only you could solve.
Non-Consumption Patterns
Who’s solving the problem without any software? What workarounds are customers using? What’s the “doing nothing” alternative?
A CRM company tracked Salesforce, HubSpot, and Pipedrive. They missed that 40% of their target market was using spreadsheets and email. Not because they didn’t want to spend money on CRM. It was because CRM was too complex for their basic needs.
The biggest “competitor” wasn’t another CRM. It was Google Sheets.
Downstream and Upstream Movement
Which enterprise tools are launching SMB versions? Which SMB tools are moving upmarket? Which tools above or below your market position are compressing toward you?
You might be enterprise-focused, tracking enterprise competitors. Meanwhile, SMB tools with product-led growth are quietly capturing mid-market accounts that you considered your natural expansion path.
Disaggregation Threats
Which point solutions are solving pieces of your platform better than your integrated approach? Where is “best-of-breed” beating “all-in-one”?
All-in-one platforms track other platforms. They miss that customers are choosing Calendly for scheduling, Loom for video, Notion for docs, and Slack for chat, rather than adopting a platform that includes all four.
The platform seemed like a winner on paper, but fell short in real life because customers found better individual solutions.
Aggregation Threats
Which platforms are absorbing your functionality as a feature? Where are you being bundled into something bigger?
Point solutions track other point solutions. They miss that Microsoft is adding their capability to Office 365, making them redundant for enterprise customers who already pay for Microsoft.
Getting Sherlocked doesn’t just happen with Apple. Any software category can be absorbed by a bigger platform.
How To See Differently
Alan Kay’s insight: “You can’t learn to see until you realize you are blind.”
The first step isn’t to gather more data. It’s to admit your current view is limited.
Exercise 1: Map Customer Jobs to Be Done, Not Product Categories
Stop asking: “Who are our competitors in project management?”
Start asking: “What jobs are customers hiring project management software to do?”
When you map jobs, you discover different categories solving the same jobs. So you keep track of who’s doing what. So you use project management software, spreadsheets, Notion, Slack threads, and email. You coordinate work across teams using collaboration tools, communication platforms, workflow automation, and shared documents.
It’s the same job, but different tools solve it. They’re all competitors, even if traditional market analysis overlooks them.
Exercise 2: Interview Customers Who Chose “Nothing”
Track prospects who evaluated you but didn’t buy anything. Not prospects who bought from competitors. The prospects who decided to stick with their current approach or built something internal.
These conversations reveal:
- What alternatives are you not seeing
- What job did you think you were solving that customers don’t have
- Where your category definition differs from the real world
Exercise 3: Study Customer Workflows End-to-End
Don’t ask customers about your category. Watch them work.
What tools do they use before yours? After yours? Instead of yours? What combinations of tools replace your product?
A client selling data visualisation software discovered that customers were using their tool, along with three other tools, to complete analytics workflows. Competitors weren’t other visualisation tools. Competitors were the three tools that, combined, did the whole job.
Exercise 4: Track “Weird” Usage Patterns
When customers use your product in ways you didn’t design for, that’s a signal, not noise.
When customers integrate your product with tools you’ve never heard of, investigate those tools.
When customers cancel, but their usage patterns show they were solving a legitimate problem, find out what they switched to.
These unusual patterns often signal that your category is changing in ways you haven’t seen yet.
Exercise 5: Assume Your Biggest Threat Isn’t on Your Radar
Your disruptive competitors don’t shout about themselves. They reveal themselves from adjacent spaces. They serve different initial customers, and only become obvious threats when it’s too late to respond.
Run this exercise quarterly: “What category shift or new entrant could make our entire approach obsolete?”
Challenge yourself to think creatively. The threats that seem unlikely are often more dangerous than the obvious ones, because you’re not prepared for them.
What This Looks Like in Practice
A healthcare software company came to Octopus in 2024, tracking three direct competitors in patient engagement software.
We mapped customer jobs to be done and found that “patient engagement” was being solved by:
- Traditional patient portals (what they were tracking)
- Consumer health apps (Apple Health, Fitbit, etc.)
- Telemedicine platforms (Teladoc, Amwell)
- Pharmacy apps (CVS, Walgreens)
- Direct-to-consumer services (Hims, Ro)
There were five different categories, each handling part of patient engagement. The client was only tracking one.
We interviewed customers who’d evaluated patient engagement software but didn’t buy. Found that 60% were using a combination of telehealth + pharmacy app + consumer health app instead of specialised patient engagement platforms.
These “competitors” weren’t competing directly. Together, they made standalone patient engagement software less important.
The client pivoted the strategy. Instead of building a better standalone platform, they built an integration infrastructure that connected all these disparate tools.
They went from competing in a crowded category to owning the combining layer that made the category work.
They finally saw the real threats, instead of focusing on the obvious but less important ones.
The Question That Could Help You See
Here’s an excellent competitive intelligence question to ask yourself:
“What would make your entire business model obsolete?”
So not questions like “what competitors are gaining share”. But “what fundamental shift would make what you do unnecessary?”
This question helps look past the obvious threats:
- For taxi companies: What if riders could connect directly with drivers?
- For hotels: What if people could rent their spare rooms?
- For retail: What if customers could order anything and have it delivered tomorrow?
- For software: What if AI could do what your product does?
The answers often seem obvious in hindsight. They’re hard to see in the moment because admitting them means facing your own vulnerability.
If you recognise your vulnerabilities, you can defend against them. If you ignore them, you risk becoming obsolete.
Why MENA Markets Intensify This Blindness
Octopus expanded into MENA through our Dubai office specifically because regional markets face compounded pattern recognition problems.
MENA companies often copy Western competitive strategies without questioning whether those strategies fit regional realities. And Western companies do the same thing when entering the MENA region, then just assume the market wasn’t ready for their product or service. So:
Western companies track Western competitors. MENA companies copy that focus. Missing regional players using completely different approaches.
Western strategies assume certain patterns of technology adoption. MENA markets can skip those steps, making Western competitive patterns irrelevant.
Western competitive intelligence depends on easy access to information. In MENA markets, information is harder to find, so standard methods don’t work as well.
We help MENA clients build competitive intelligence frameworks grounded in regional realities, not imported Western assumptions about how competition works.
What to Do This Month
Run the blindness audit:
Question 1: List your top 5 competitors. Now explain why customers would choose each one.
If you can’t explain their real value from the customer’s view, you’re only tracking the obvious—not truly understanding your competition.
Question 2: List 5 ways customers solve the problem you solve without using your product category.
If you can’t name five, you’re missing competition from people who solve the problem without your kind of product.
Question 3: Name 3 adjacent categories that are expanding toward your space.
If you can only list direct competitors, you’re missing how categories are merging.
Question 4: Identify customers who evaluated you but bought nothing. Interview them.
If you don’t know where those customers went, you’re missing a chance to understand your real competition.
Question 5: Map the end-to-end customer workflow your product fits into.
If you focus only on your own product, you miss how customers use other tools in their workflows.
These exercises help you find gaps in your thinking—the threats right in front of you that you miss because they don’t fit your usual patterns.
At Octopus Intelligence, we help companies see beyond their trained blindness.
We map and monitor competitive threats you’re not seeing because they don’t match your category definitions, feature expectations, or business model assumptions.
We interview customers who chose alternatives you’ve never heard of. We can track adjacent categories expanding into your space. We identify threats of disaggregation and aggregation before they become obvious.
Get in touch. Tell us who you think your competitors are.
We’ll show you who’s actually competing for your customers, including the threats you can’t see because your brain isn’t wired to recognise them.
Because the most dangerous competitor isn’t the one being tracked on your expensive CI software platform.
It’s the one you’re staring at without seeing.
You can’t see clearly until you admit you’re blind to some things.
We are Octopus. The Global People-Powered Competitive Intelligence Agency.
Outsmart your competition. Make the unknown known. Octopus helps you gain clarity in complex markets. With clients and tentacles around the world, we deliver sharp, actionable competitive intelligence through a blend of deep primary (HUMINT) and secondary research. If you’re looking to make smarter decisions, beat the competition, and reduce uncertainty, we’re the partner you want on your side.
Frequently Asked Questions (FAQs)
How do I know if I’m blind to real competitive threats?
When was the last time a competitor surprised you? If your answer is “never” or “rarely,” you’re probably missing the point. Markets change all the time. If you’re never surprised, you’re not looking, or you are and not seeing changes. Run a blindness audit every quarter. Analyse the customers who bought nothing. Watch for new categories. Look for alternative solutions.
What if my team disagrees about who our real competitors are?
Disagreement is good because it brings out different perspectives. Don’t force everyone to agree. Track all the competitors your team suggests and see which ones show up in lost deals or customer decisions. Let customer behaviour settle the debate, not internal politics or labels.
Is it possible to focus on a competitive threat or direct competitors?
Do both, but with a different focus. Track 3-5 direct competitors closely—watch their products, pricing, and positioning. Keep an eye on 10-15 adjacent or emerging threats with lighter monitoring, like quarterly updates and major news. The goal is to stay aware without getting overwhelmed. If these threats start showing up in deals, pay closer attention.
How do I convince leadership we’re blind to real threats?
Share real customer evidence. For example, “15 customers who left last quarter all switched to [tool we don’t track]. Here’s how they’re using it.” Data on customer behaviour is more convincing than just talking about categories. If leadership ignores adjacent threats, track them anyway and report each quarter if they start showing up in your deals.
What’s the difference between being blind and being appropriately focused?
Being focused means you know about wider threats but choose where to spend your time and resources. Being blind means you don’t even know those threats exist. Here’s a test: Can you name five ways customers solve your problem without your type of product? If yes, you’re focused. If not, you’re blind.
How often should I reassess what I’m not seeing?
Quarterly should be fine. Do exercises that break your usual patterns. Map out the jobs to be done, talk to people who didn’t buy and look at other categories. Watch for unusual customer behaviour. Markets change constantly. What worked last year might blind you now. Regular reassessment helps you avoid getting stuck in old habits.
Can competitive intelligence tools help me see what I’m missing?
Tools only track what you tell them to. They can’t fix blind spots in how you see the market. If you only watch “project management software,” your tools will miss something like Notion. Use tools to help once you know what to look for. People decide what matters; tools just help you keep track.
What if the “threats” I’m supposedly blind to turn out to be irrelevant?
That’s possible. Not every nearby category is a real threat. Don’t assume everything is a danger. Test if things you’ve ignored actually show up in customer choices. Keep an eye on them. If they start appearing in lost deals or customer workflows, dig deeper. If not, keep watching but don’t spend too much time.
Key Takeaways
- Many companies overlook the real competitive threats because they focus only on direct competitors within their category.
- These blind spots arise from various patterns, including category, feature, customer segment, and geographic blindness.
- To identify unseen competitors, businesses should map customer jobs, study workflows, and interview those who chose not to purchase.
- Recognising that the biggest threat often isn’t visible is crucial; companies need to reassess their competitive landscape regularly.
- In MENA markets, traditional competitive strategies may fail, requiring a tailored approach to understand local dynamics.
