1) it distracted energy from the single most important focus of a product organization: the customer
2) driving product changes based solely on competitive analysis almost never yields positive results.
I like to think of startups in emerging markets as sailboats in a harbor. Given the limited surface area of the harbor, it’s often hard to tell exactly which boats might be headed toward your destination. But as the boats move into the open water, the distances between them increase, and you can start to get a sense of their potential destination. Boats you thought might be on the same course are now barely visible on your horizon; boats you might might have ignored are now in your wake; and of course new boats will appear from time to time.
All companies have a destination they are driving toward that will get adjusted periodically based on changes in the market and its customer base. Responding to competitors can be good business when it reflects what your customer and prospective customers are telling you, and is consistent with your long term direction. But over-focusing on what competitors are doing at the expense of what your customers want you to do has the potential to leave you... luffing in the wind.