Finding Your Differentiator in a Crowded SaaS Market

A lot of new SaaS founders shy away from building a product that already exists. There seems to be this ‘common understanding’ that you have to find something new and unique and that if you don’t you are wasting your time. I especially hate when people say ‘Ooh that’s a crowded market’, or ‘ooh there’s a lot of competition’. Yeah, duh, that’s a good thing. That’s called a market. There’s a reason why there’s a lot of competition—There’s a lot of demand. Nobody says there has to be just one SaaS for every type of thing. You absolutely can and should try and compete. It’s not easy, but then neither is coming up with something brand new and unique. So what do you do? Focus on a differentiator.

What is a Differentiator?

A differentiator, sometimes called a Unique Selling Proposition (USP) or unique value prop, is the distinct value that sets your product apart from competitors. It’s the reason why users should choose your SaaS over others. Differentiation can come from various angles—features, user experience, integrations, pricing, customer support, or even branding.

Competing in a Crowded Market

By definition, markets are competitive. Every worthwhile problem already has some kind of solution available. While many founders dream of uncovering a completely unique idea, the reality is that opportunities often come from improving or refining existing concepts rather than inventing something entirely new.

Take Slack, for example. Instant messaging was a well-established market with dominant players like Skype, Microsoft Teams, and even IRC before Slack existed. However, Slack succeeded by making workplace communication smoother, integrating with essential tools, and focusing on an intuitive user experience. Their differentiator wasn’t the idea of IM itself—it was how they executed it.

Finding Your Angle in an Existing Market

If you’re building a SaaS product in an established space, consider the following approaches to differentiation:

1. Better User Experience – Can you make the process simpler, faster, or more intuitive?
2. Focused Target Audience – Can you tailor your product for a specific niche that is underserved?
3. Pricing & Business Model – Can you offer a more affordable or flexible pricing model?
4. Ecosystem & Integrations – Can you seamlessly connect with other essential tools?
5. AI & Automation – Can you leverage automation or AI-driven insights to enhance efficiency?

How We’re Approaching Differentiation at Scout

At Scout, we’re still refining our differentiator. Our current hypothesis is that our value lies in combining web and product analytics with integrations from other services to provide founders with a clear snapshot of their growth opportunities. Many analytics tools focus on just reporting data, but we want to go further by offering actionable insights.

Recently, we’ve added integrations for Google Search Console and HubSpot, helping founders connect their web analytics with marketing and SEO insights. Our long-term vision includes developing a marketplace of integrations, making it easier for startups to centralize data from multiple sources in one place.

Final Thoughts

You don’t need to reinvent the wheel to succeed in SaaS—you just need to make a better one. The best differentiators aren’t necessarily about what you’re building, but how you’re delivering unique value to your audience.

For SaaS founders working in competitive spaces, the key is to keep refining and testing your differentiation strategy. Pay close attention to user feedback, iterate quickly, and always ask yourself: What makes us the better choice?