पाठशाला Pathshala · विचार Vichār, The idea · Lesson 11 · Build
Competitive analysis without the flattering two-by-two
The two-by-two with your logo alone in the top right persuades nobody. Write a map of who wins each customer today, including spreadsheets, a paid person and doing nothing, and why.
Pathshala, The Founder Library · 11 October 2026 · 7 min read
Investors have seen the slide a thousand times. Two axes chosen by the founder, a handful of competitors placed by the founder, and the founder’s own logo alone in the top right corner. It is the least read slide in the deck because everyone knows how it was made.
Worse, it misleads the founder. The rivals on the two-by-two are rarely where the deals are lost. This lesson replaces the quadrant with a map of who wins each customer today and why, and gives a figure that shows where your losses actually go.
What the two-by-two hides
The quadrant has three structural flaws. The axes are chosen after the fact to separate you from everyone else, so the separation proves nothing. The rivals are placed by you, on dimensions you defined, with no evidence. And it shows only companies, usually venture-funded ones that look like you, which leaves out the alternatives most of your prospects actually use.
Sequoia’s business plan template asks for something different. Under competition it asks for direct and indirect competitors and a plan to win. Under the problem it asks how the pain is addressed today and where current solutions fall short. Read together, the two questions describe a map, not a quadrant: what the customer does now, what is wrong with it, and why you will win.
An investor reading the quadrant learns one thing: whether the founder knows the market well enough to be uncomfortable about it. A founder who has lost deals knows exactly who took them and why, and cannot bring themselves to draw a chart in which nobody is near them. The quadrant therefore signals the opposite of what it intends. It suggests a founder who has not yet sold enough to be beaten.
The real competitors are what the customer does today
The positioning consultant April Dunford starts with one question: what would a customer do if your product did not exist? Often, she notes, the answer is do nothing, which in practice means a spreadsheet, a manual process or hiring an intern. Those are your competitive alternatives, and they are the ones a customer compares you with when deciding whether to buy.
In India the list is longer and more human. A spreadsheet and a WhatsApp group. A register kept by hand. A munim, an accountant, an agency or a nephew who is good with computers. A ten-year-old desktop package that works well enough. A habit of solving the problem at the last minute, every quarter, with stress and overtime. None of them appears on a competitor slide. All of them win customers from startups every day.
Doing nothing is the largest of them. Matthew Dixon and Ted McKenna, analysing about 2.5 million recorded sales conversations for The JOLT Effect, found that between 40 and 60 per cent of deals end in no decision rather than in a win for anyone. Less than half of those losses, Dixon said, were customers preferring the status quo; the larger share were customers afraid of making a mistake. Either way, the deal went to no vendor. A competitive analysis that leaves out doing nothing leaves out the competitor that beats you most.
The map: one row per customer segment
Draw a table with one row for each customer segment you sell to, and five columns. Who wins today: the alternative most of that segment uses now, named specifically. Why it wins: the honest reason, often that it is free, familiar or already paid for. What switching costs them: money, time, data migration, the risk of looking foolish to a boss. What would make them switch: the event or proof that tips it. Your evidence: how many of them you have seen switch, and from what.
The rows matter because the answer changes by segment. Large customers may use a rival product and switch for a feature. Small ones may use a spreadsheet and switch only when a regulation or a deadline forces them. A map that averages the two describes nobody. If you have done the [ideal customer profile](/library/ideal-customer-profile-on-one-page) the rows are already written.
A worked example: document collection for CA firms
A team in Ahmedabad sells a tool that lets small chartered accountancy firms collect documents from clients before the income-tax filing season. Their deck has a two-by-two with three practice-management suites in the lower quadrants. Their pipeline tells a different story.
Of a hundred firms they pitched last season, about forty did nothing new: they collected documents the way they always had, in the last fortnight, by phone. Thirty used WhatsApp and a shared drive. Fifteen had a junior whose job was to chase clients. Fifteen used one of the suites on the slide. The team won about eight per cent of the do-nothing firms, twenty-two per cent of the WhatsApp firms, twelve per cent of those with a junior and thirty per cent of the suite users.
The segments differ too. The larger firms, with five or more partners, mostly used a suite or a junior, and the team won them on speed of setup. The smallest firms, run by one accountant, mostly did nothing or used WhatsApp, and the team almost never won them in the first meeting; it won them in the second season, after the owner had lived through one more scramble. Two rows, two plans to win, and neither looks like the two-by-two.
Put those numbers in the figure. The team wins about sixteen firms in a hundred. The rival on the slide takes about ten of the losses. Doing nothing takes nearly thirty-seven. The competitive problem is not the suite. It is a firm owner who has survived every previous season without changing anything, and the plan to win has to be about the cost of the last-fortnight scramble, not about features the suites lack.
The competitor that beats you most often is the customer’s habit. It is never on the slide.
How to put it in the deck
Replace the quadrant with a short table titled “Who wins today, and why we win”. Three or four rows: the alternatives, with the share of your pipeline using each. One line per row on why customers stay with it and one on why they switch to you, with a number such as switches observed or a win rate. Name the venture-funded rivals in their row, without drama; an investor who knows the space will respect a founder who knows that the rivals take a minority of the losses.
For the CA-firm tool the first row would read: doing nothing, forty per cent of the pipeline; firms stay because last season’s scramble was survivable; they switch after a season in which a missed document cost them a client or a penalty, and we have seen eleven such switches. The last row would read: practice-management suites, fifteen per cent; we win three in ten on setup time. Four rows like that tell an investor more than any quadrant, and every number in them can be checked.
Then state the plan to win as a plan against the largest row. If doing nothing is the biggest competitor, the plan is about making the cost of inaction visible and the switch safe: a migration done for the customer, a first month that pays for itself, a reference from someone like them. That is a more credible plan than a feature list, because it is aimed at where the losses actually go. The [jobs-to-be-done](/library/jobs-to-be-done-job-customer-hires-you-for) interview is the tool for finding the words.
A monthly ritual: the loss log
From this week, every deal that ends without a purchase gets one line in a sheet: the date, the segment, what the customer kept using, and the reason in their words. At the end of each month, count the lines by alternative and update the map and the figure’s numbers. Within three months the log will tell you which alternative takes most of your losses, whether that is changing, and whether your plan to win is working against it.
Two rules keep the log honest. Write the alternative the customer named, not the one you suspect; if they said they would keep using the spreadsheet, that is the row, even if you think a rival was in the room. And count deals that went silent as losses to doing nothing, because that is what they are. Founders who leave the silent deals out discover, a year later, that most of their pipeline died that way. Read the log with the sales team, not alone. The pattern that matters is usually obvious within a page: the same alternative, the same reason, the same segment. That line is your competitive analysis. The two-by-two can stay in the appendix for anyone who asks.
The worked example is illustrative. Research figures are from the sources below, checked in October 2026.