The Hidden Players in Your Industry (and Why They Matter)
Most companies keep a close eye on their direct competitors. Those are the firms you compete with in pitches, see quoted in articles and hear them mentioned by customers.
But in my work, I’ve found that some of the biggest threats aren’t the obvious ones.
They are the hidden competitors - the new tools, workarounds, or substitutes just outside your line of sight. These are the ones your customers are using instead of you.
These could be new companies or an established small player that has just launched a new product that is quickly gaining steam.
If you are only watching the usual players, you’re most likely missing early signals that can cost you revenue and relevance.
Three Types of Competition
When I help clients map their competitive landscape, I go beyond the obvious. Here is my basic framework:
Direct Competitors
These are the familiar players you already know that offer similar products or services to your general customer base.
→ Example: Two consulting firms targeting the same segment of healthcare clients.
2. Indirect Competitors
These competitors solve the same problem, but in a different way. They are often in adjacent categories or using entirely different methods.
→ Example: A personal trainer vs. a fitness app
3. Substitutes
These are market alternatives where the customer chooses to do nothing, do it themselves, or delay.
→ Example: A solo founder using spreadsheets and ChatGPT instead of hiring support.
Most businesses focus heavily on #1. But in many cases, #2 and #3 are where disruption begins.
Why Indirect Competitors Deserve Your Attention
Let’s say you run a service business. You’re likely tracking others who offer similar products for a similar price.
But your indirect competitors may include:
A larger firm bundling your service into a broader offering
A new AI tool that can partially automate the service
A DIY platform that teaches customers how to solve the problem themselves
Even if these options are not yet enormously popular in your market, they can change customer expectations on price, features and speed.
And if you don’t know who is shaping these expectations, you’re already behind.
The Substitutes You Can’t Afford to Ignore
Substitutes are harder to spot because they aren’t companies. They are the decisions customers make when choosing not to buy anything at all.
Here’s what that might sound like:
“We’re going to try handling this internally for now.”
“We’re using ChatGPT for now. It’s not perfect, but it gets the job done.”
“We want to wait until we’re a little bigger before investing.”
This is not another firm stealing your buyers - it is an internal workaround replacing the need for your service.
A Simple Way to Map Hidden Competition
Here’s a quick exercise I use with my clients to identify the less visible players:
Step #1: Identify Direct Competitors.
Start with the companies your clients already compare you to. Make a list of lost deals, client shortlists or those found in RFP processes.
Step #2: List Indirect Competitors.
Ask yourself who else is solving the same problem in a different way? These could be software platforms, agencies, AI or DIY tools.
Step #3: Spot the Substitutes.
Make a list of what your potential clients (or current ones) are doing instead of solving the problem. This can include delaying a decision, using spreadsheets, delegating to junior staff or writing off the urgency altogether.
What to Do With All of This Insight
Now that you’ve mapped the full landscape, use it to refine your strategy:
Update your messaging: If most potential customers are trying to DIY first, you can highlight the cost of delay or the risk of incomplete information in your materials.
Adjust how you explain your value: Rather than just “better than the competition,” frame your service as faster, more reliable or easier to use.
Refine your pricing and packaging: Consider whether a more streamlined offering could compete with new tools or hesitant buyers who are just exploring their options.
It’s easy to feel like you know your competitors already, but some of the most important players aren’t always visible.
If you can see these hidden players and respond to them before they become roadblocks, you go from just competing to leading the market.
Need help mapping your real competition? You can reach me by replying to this email or at kristen@kklresearch.com.
Until next time,
Kristen