We get overwhelming pressure to respond to what competitors are doing or worse, what they are rumored to be doing.

How influenced should you be by competition and markets?

Like all things in life, it is about balance. Too often, people tilt into a competitive mindset. This mindset leads people to make product decisions solely through the lens of competition.

This is an occupational hazard of PMs. In my experience, PMs are competitive by nature. They have a high need to win. The idea that some competitor may outflank them keeps them up at night. They don't want to be blamed for not seeing a competitor release something more succesful. This leads them to play 4D chess, building features to respond to a real or perceived threat. Worse, it can lead to not having conviction in the product. They merely respond once some other product does a thing.

Designers are driven by a fear of being left behind, seeming out of touch or worse, not at the leading edge. The design community rewards novelty and craft that bends towards being first or cool vs being succesful.

For the most part, you should ignore the competition but pay attention to the market. Your job is to bring a product to market that is worth more than it costs to build. Trying to predict what your competitors will do is a fun parlor game but it is distracting. It causes teams to waste cycles… remember nothing is free.

Don't get sucked into the speculative game of what a competitor might do. Even when competitors launch things, don't assume you should just copy it. Think about how many features or products your company has launched for reasons that are either self serving, flawed or just downright a bad idea. Why are you racing to copy these?

You can't outright ignore competition, especially if a competitive product is shaping the market, but be measured in your response. Having conviction of the product you want to build and adjusting to the market is much better than chasing competitors.