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Recently, Iâve tried my hand at running my own startupâââa product designed to improve the development process. Aside from the extensive learning, it made me understand all of the jokes from âSilicon Valleyâ and think a lot about competitor research at the zero product stage. Usually, we seek to compare our idea with existing products, but how to compare something with nothing?
In this post, Iâm going to share some thoughts about competitor research to help early startups to get accurate, actionable information and avoid a few common mistakes.
Building the first product is so exciting! Thatâs the reason why competitor analysis (if itâs being done) often looks like this:
Of course, itâs just exaggeration. But I once saw a spreadsheet just like that! This happens when the researcherâs goal is not to evaluate competitive landscape properly, but to prove their product is better.
Competitor research is a powerful tool to find your opponents and reveal opportunities. Letâs do it thoughtfully.
The only way to succeed is to find opportunities that competitors overlooked.
1. Evaluate yourself
To discover your productâs competitive landscape, you definitely need a very good understanding of what you doing. It sounds weird because everyone has it, right? Not really.
Recently I spoke with an entrepreneur who was building âThe new Yelpâ. I asked him why people wouldnât go to the original one instead? Why people would prefer something new over familiar Yelp or Tripadvisor? What was his strategy and what benefits for customers that others donât have? He just shrugged and said that the old Yelp is obsolete and this is just a matter of time until the new one comes. So he was planning to build a good product for future Yelp crisis.
So, yes, at the beginning we need to ask ourselves the most important questions.
- What are the problems Iâm trying to solve? (What do my potential customers struggle with?)
- How Iâm going to solve it? (What is the product idea?)
- Who has this problem? (Who exactly are my customers?)
- How can I be sure the problem is valid? Have I spoken with real people who have this problem? (Spoiler: if there are successful competitors, itâs probably a valid problem.)
Example of the outcome you should have in the end:
I know for sure that_____ and _____ have problems with ______ that ruin ______. It can be solved by _____ and ______. And my product idea, which is _____, can help resolve it.
This form should be used very roughly, because after conducting research you may need adjustment or even completely changing the whole vector. However, youâll get a starting point for the research.
2. Solution VS addressing the problem
It seems very same, right? Not really.
Doing competitor research for my startup I have begun from products that have a similar principle of improving the engineering process as ours: watching repositories to find âbadâ pull requests. There were very few of them, but totally out of our league: GitPrime and Codeclimate. Looked very optimistic: we still had a niche. But then I shifted the focus to the problem: a lack of development visibility. And found at least 5â7 products that solve the same problem. So looking for an exact product is the self-delusion.
The truth is the customers donât choose which of similar products is cheaper or they likes more. They look for a solution that benefits more.
3. Think twice about the price
Many new companies hope to be competitive offering the lower price for the same product. In this case, competitor research led to conclusions like âHmm⊠we can deliver the same product but cheaperâ. Stop right there and think why they have such high prices:
- Are they monopolists? Because if there are no other competitors, yes, they can dictate prices and you have a chance. But how many monopolists do you know?
- Do they have a solid brand? If yes, again, they probably spent a lot of money and time to create it. Are you ready to spend as much? Or do you know how to get famous without money?
- How big is a product? Because your competitor probably pays developers, product managers, designers, support etc. Also, the price of a product includes infrastructure, services and maintenance.
And then answer yourself: am I ready to do the same offering low prices?
4. Unknown competitors
Another thing to keep in mind: looking for competitors donât forget that the biggest part of the information may be hidden. Image, youâre working on integration for two well-known products. And then suddenly they released this feature, which made this product useless. And no one knew about that.
This probably one of the most complicated parts of the research. The almost all ways to get potential competitorâs plans either illegal or inappropriate. However, you can try to recognize the company direction.
- If a company is big, then check acquisition. Maybe they bought technology or acquired team with the ability to develop this technology.
- If a companyâs small, then check the background of founders and key managers. Itâs far from 100% but could give a clue.
- Attend conferences and meetups where your competitors are involved. Sometimes they can reveal something.
- Check social networks. Maybe theyâre making surveys or something relating to the problem you solve.
Again, legal methods are very vague. Eventually, this is the reason why we usually find out about that kind of things later that weâd want.
5. Customer point of view
Another thing that helps you to get better results itâs the customersâ opinion. You assets your competitors from your point of view. But It might be very helpful to take a look from the customersâ side. In order to do that donât hesitate to ask your friend and colleagues why and how they use it (if relevant). The other way to obtain this important information is honest reviews. Of course, if youâre stepping into the new market or trying to create one it might be useless. Otherwise, there are some services to explore:
These services not only can help you to understand the level of customers satisfaction by competitors products but also give free customer insights.
- Size of companies using competitive products.
- Job titles of users.
- Market (finances, insurance, whatever).
Looks like Jira is doing great
And also provide you with thoughts about the pros and cons of products.
Some of them even make the user answer a question ââWhat business problems are you solving with the product?ââ. Thatâs a huge advantage!
Of course, you shouldnât read all the reviews and create every requested feature. Your goal is to understand deeper your potential customers, their problems and feelings about products at the market.
They said: begin from the market, not from the product. Even if your product doesnât exist yetâââexplore the space.
But whatever results youâve got, donât try to copy every cool feature. Your own way, your own approach to solving problems can lead you from taking market share to creating a brand new market.
Did you find this post helpful, interesting or thrilling? Then click a few times on the âclapâ icon. It means a lot to me!
5 Things Early Startups Should Know about Competitor Research was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
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