If you’re considering using Generative AI (Chatgpt, Gemini, Claud, etc) or monitoring newswires and press releases, that’s fine. However, you do it with the same data as your competitors; same assumptions and where’s your competitive advantage? The only advantage here is if your competitors are not bothering to look. Or you have found a magic prompt from an AI prompt guru that gives you what you need.
A few months back, I attended a competitive intelligence conference where a senior competitive intelligence professional working for a defence IT company in London told me he found a great generative AI prompt that he is using. He even gave me the link to it.
It was one of those found on a “how to run a business on AI” website. So it was available to all; it was now being trained on the CI professional’s data and was poor at best. But it also gave you the answer you wanted to see straight away. It was the wrong answer, but it was an answer.
You’re playing the same game if you’re doing competitive analysis like everyone else. But with worse cards.
Most teams gather data. They sort features into grids. They benchmark pricing. And they summarise differentiation in sanitised decks, which no one reads twice. Then they wonder why the upstart with worse tech, clunkier UX, and zero polish is eating their lunch.
The truth?
Your competitor’s edge may not be built on logic.
It’s built on emotion, story, habit, identity, laziness, and perception.
If you want to win, stop studying markets like an economist and start analysing them like a behavioural psychologist with a grudge. Like a customer. And it works because it doesn’t care about what people say—only what they actually feel and do.
This isn’t a framework. This is a mindset. A weapon. It’s a call to quit worshipping rational models and start pulling the right irrational levers.
Here’s how you could work it:
1. Burn the Assumptions Everyone Else Protects
Don’t start with analysis. Start with destruction.
Competitive intelligence begins by torching the sacred cows:
Why do we think they’re winning?
What if our reasoning is lazy?
What if the reasons we believe are just polite cover stories for deeper, emotional truths?
The most common mistake is that teams assume their competitor wins on speed, features, or price. That’s usually surface-level. Dig deeper.
Stripe
Stripe isn’t dominant because of its API documentation. That’s the rationalisation. Stripe became the developer’s brand. Their docs were onboarding, yes—but they were also a signal. Stripe said: This is for you. We get you. We built this with you in mind. That emotional clarity outperformed any feature parity.
So maybe stop asking, “How do we catch up?”
Start asking, “What if they’re not winning for the reasons we think?”
2. Study the Human Experience, Not the Product Sheet
Markets aren’t rational. Customers don’t behave like economists want them to.
They don’t pick the best product. They pick the one that feels right.
That means you stop tracking click-throughs and start mapping how people feel at each moment of engagement. Ask:
When does the product make people feel smart, seen, or safe?
When does it make them feel dumb, uncertain, or exposed?
Are people sticking with a product because of value—or because of inertia, comfort, and identity?
So maybe forget feature parity. Measure emotional resonance. How does it feel to use your competitor’s product?
3. Expose the Psychological Biases Your Competitor is Exploiting
Behaviour beats logic. Always.
Don’t just look at what people do. Hunt for the biases and blind spots underneath the behaviour. That’s where competitive advantage lives.
Start asking:
Are users staying because of loss aversion (fear of switching)?
Is social proof doing the heavy lifting?
Are they using status signalling (premium plans, invite-only access)?
Are limitations being framed as features?
Notion
Notion‘s growth in popularity wasn’t because it was “better” than Coda. It was because it nailed the aesthetic identity of digital minimalists. It wasn’t about workflows—it was about vibes. Templates. Emojis. Identity alignment. Coda added features. Notion added cool.
So, map not just your competitor’s roadmap. Look at the emotional levers they’re pulling, often without realising it.
4. Use Small, Cheap Fixes to Shift Perception Fast
Don’t default to building. Look at reframing.
Many respond to competitor gains by adding to their build backlog. Don’t build more. Look to change perception with a tiny, clever move. Ask:
What’s a one-week tweak that could change the entire narrative?
How can we create the illusion of improvement without a product overhaul?
Arc Browser
Arc Browser (2023) launched a note feature called “Easels.” It’s trivial tech. But it repositioned Arc as a creative tool, not a Chrome clone. One subtle addition shifted perception and attracted a new cohort of design-led users. Blast the assumptions.
You don’t need to outrun your competitors. You need to look like you already did.
5. Flip the Obvious. Do What Makes No Sense—Yet
If your strategy sounds “smart,” it’s probably obvious. Obvious doesn’t win.
Don’t just ask better questions— ask backwards questions:
What if we added friction instead of removing it?
What if we made something slower but more enjoyable?
What if we mocked our competitor’s core pitch?
Pitch the dumbest idea you can think of. Then, force yourself to make a serious case for it. The answers can be really weird and awakening.
6. Test Small. Learn Fast. Avoid Consensus at All Costs
Consensus is where good ideas go to die. While strategy teams can debate decks and chase alignment, others run small, fast experiments. Realise that no amount of internal agreement replaces actual behavioural feedback.
So instead of:
Redesign your homepage and test five headlines on paid traffic.
Rebuild your onboarding, change one CTA and track engagement.
Launching a rebrand, run an ad that mimics your competitor’s tone—see who clicks.
Lasso
Lasso (2023), a Shopify plugin, tested a new notification: “You’re missing money.” It replaced their usual performance stats. It doubled engagement. No engineers were involved. It’s just a copy change rooted in loss aversion.
Test now. Ask questions later. Ship the idea that makes you nervous.
7. Find the Magic Hiding in the Boring Stuff
So don’t be better. Be more interesting. Look for ways to add meaning to the mundane:
Use rituals to make onboarding feel like a club.
Frame technical limitations as features for power users.
Add exclusivity where there was once indifference.
Rewind.ai slowed down its onboarding by requiring invites. That constraint made the product feel like a privilege. Nothing changed under the hood. But it changed how people talked about Rewind. That made all the difference.
Find where your competitor added magic to an otherwise boring product. Then do it better.
Final Word: How to Tear Apart Assumptions, Decode Irrationality, and Beat the Market on Perception
The safe answer isn’t safe.
The logical move isn’t smart.
And your best instincts are often your worst enemy.
If the strategy feels obvious, it’s already obsolete.
If it makes you uncomfortable, irrational, or even a little embarrassed…you’re finally getting somewhere.
Work against your better judgment.
That’s where the real advantage lies.
Let’s talk…
https://www.octopusintelligence.com/how-to-tear-apart-assumptions-decode...
Octopus competitive intelligence agency