Your Biggest Competitor Probably Isn't a Vendor

A couple of years ago I was deep into a product strategy update. Halfway through we ran a pipeline analysis that changed the direction of the whole thing.

Two thirds of our lost deals weren’t lost to competitors. They were lost to the status quo. Spreadsheets, internal scripts, manual processes that someone built years ago and nobody wants to touch. The buyer looked at what they had and decided it was good enough.

I thought we had a competitor problem. We had an inertia problem.

This isn’t unusual, as it turns out. Matt Dixon and Ted McKenna found that 40 to 60 percent of qualified B2B deals end in “no decision”. Ebsta and Pavilion’s 2024 benchmark put it at 61 percent. For every deal you lose to a named competitor, you’re probably losing two or three to inaction.

Making it actionable

Product teams have been citing “competing against the status quo” for years. Few change anything about how they actually build or sell. What made the difference for me was having a strategy framework that forced a proper diagnosis.

Richard Rumelt’s Good Strategy, Bad Strategy breaks strategy into three parts: a diagnosis (what’s actually going on), a guiding policy (the approach to the challenge), and coherent actions (steps that reinforce each other). Most product strategies skip the diagnosis entirely. They jump straight to “build these features” or “hit this revenue target” without naming the challenge they’re solving.

When I wrote the diagnosis for my product area, the original draft focused on competitive differentiation. Feature gaps, pricing pressure, positioning against specific vendors. It felt rigorous because it was detailed. But the pipeline data said we were solving the wrong problem. Buyers weren’t choosing a competitor over us. The internal script that “mostly works” was beating us more often than any vendor.

What actually changed

Once the diagnosis shifted from “we lose to competitors” to “we lose to inaction,” things started falling into place.

The guiding policy went from “differentiate on features” to “make the cost of switching negligible.” That sounds like a small change, but it rewired the roadmap. Feature comparison matrices stopped driving priorities. Instead we were asking: how fast can a new customer get to their first successful outcome? Where do people stall and give up? The answers had nothing to do with what competitors were shipping.

The sales conversation changed too. Less “why we’re better than Vendor X” and more “why the status quo is more expensive than you think.” That reframe came directly from the diagnosis, and it landed better because we could back it with the pipeline data.

The coherence test

The part of Rumelt’s framework that earns its keep is the coherent actions test. If your actions aren’t coherent with your guiding policy, you don’t have a strategy. You have a to-do list.

I found several contradictions when I applied this. Sales collateral that led with feature comparisons. Onboarding flows designed for evaluators who already knew they wanted the product, not for sceptics weighing the cost of change. Success metrics that measured adoption depth but not adoption speed.

None were bad decisions in isolation. They just weren’t coherent with the diagnosis. Fixing them was uncomfortable because it meant changing things that seemed to be working. They were working, just against the wrong problem.

The question worth asking

If you haven’t categorised your closed-lost deals recently, do it. Not a win/loss review against named competitors. A full categorisation by what actually happened: lost to competitor, lost to no decision, lost to timing. The split might surprise you.

When most of your lost pipeline chose inaction over action, the question changes. Not “why should they choose us over Vendor X?” but “why should they change at all?” That question reshaped my product strategy. Rumelt gave me the structure to act on it. Dixon’s JOLT Effect has the data behind why it matters.