This question is the second most asked question on Quora in the marketing topic and is also featured in my 67 most asked questions by entrepreneurs list. It’s funny that most of the similar questions are asked by the people who already have a startup. If my analytical skill is good, I can clearly see that most first-time entrepreneurs realize to research their competitors after they start a startup.
If you’re one of them then not researching your competitors will not be the death of your startup. But there’s a big chance that you’ve wasted lots of man-hours on building something that is not required.
If you’ve had researched your competitors thoroughly before you started building your product, you would have saved lots of time on building or adding some features to your product which are not at all required. To successfully compete against your competitors, you either need to provide a better experience to your customers, or provide a similar experience but at a lower cost.
Confused? Whatever I said above will make much more sense after you complete reading this story.
Types of competitors
Firstly, you need to understand the types of competitors. Yes, you can classify your competitors. Haha!
These are the companies which offer products similar to yours and target same market segment. For example, I Innovate’s primary competitors are Inc. and Fast Company. We both are a media company and almost target same segment.
Your primary competitors are your biggest threat.
These competitors offer a similar product but target different market segment. For example, I Innovate’s secondary competitors are Forbes and Fortune. Both of them target executives of enterprises.
These competitors offer a different product that is related to your industry but target same market segment. One of I Innovate’s tertiary competitors is Medium.com. Medium.com does not have a magazine as of now but it can clearly launch one and become our primary competitor.
How Do I Research My Startup’s Competitors?
This is where things get interesting.
1: Your competitors are those who have the same value proposition as yours and target the same market segment.
You need to know your value proposition. The value proposition is the biggest benefit of your product to a particular market segment. If you’re Thomas Edison and your product is a light bulb then your value proposition would be that my product provides you light even during the night.
Now, go to Google and start searching based on this value proposition. These will be your primary competitors.
Don’t forget to use Inverted commas (“) and plus sign (+) to find specific pages.
Pro tip – If you put something inside inverted comma (“), Google will show only those pages which has that exact phrase. If you want to combine multiple keywords, use plus sign (+).
Don’t stay only till page 1 on Google. Go to page 5, 10, or even 50 till you no longer find any primary or secondary competitors. Above screenshot shows you how can you use Google to find your competitors.
2: There are other tools also apart from Google
Now that you know who are your competitors, go to below sites and start searching them
- Google Trends – You get to see what is trending in your industry. If you’re in the music industry and Beyonce just drops a new album then it’ll come here.
- Google Alerts – You get to see what is happening in your industry. If you’re a mobile game company and you suddenly see that PUBG is getting millions of downloads, most likely it’ll come up here.
- CrunchBase – A repository of almost all startups in the world
- Quora – A Q&A site where people ask questions
- AngelList – Also a repository of almost all startups in the world
- Reddit – An online forum where people like to talk on a variety of topics
3: Check their social media and see what people are commenting on their posts
Seeing what people are talking about in their social media posts will give you a lot of insights. You can analyze the sentiments, and understand whether those people are happy, neutral, or sad.
Pro tip – Pay lots of attention on the comments in those posts where your competitors have shared an offer, a new version of their product, or even a new product. If people write happy comments then they’re doing very good. Many a time, people also write what feature they would like to have this new version.
Here’s a classic example. Amazon Echo pushed a new version and this happened. Haha!
4: Your customer can tell you one thing they like most in your product
Forget about this quote from Henry Ford.
If I had asked people what they wanted, they would have said faster horses
This quote is valid only for those products which are completely new to the market like Uber. For most of us, our product is not completely new. It is already there in the market.
Sidebar: If you think that Uber was first in the market and it did not have any competitor, you are not correct. Its competitor was all those taxi services which were running on meters.
Approach your customers and ask them which feature do that like the most in your product. Mail them, call them, or even text them. But approach them.
They’ll mention so many things that they like in your product. You’ll also see so many answers where they’ll simply say that your competitor A is doing better than you at this.
Airbnb does it.
5: Ask your competitors’ customers
Yes, you heard it right. Ask your competitors’ customers. You can get a list of your competitors’ customer in an hour.
Go to their FB, Instagram, and Twitter page and start reading the comments. You’ll see so many times when someone recommends something. Those people are the customers.
Here’s an example, that person is surely a customer of Apple.
Approach them and ask one thing they like most in your competitors’ products and their biggest pain they face in those products.
Once you get enough feedback, you’ll start to see a pattern and one or two pains will be quite common. Build a feature that will address those pains and you’ll have a new value proposition for that segment.
6: A sneaky way to know about your competitors is to hire their employees
Nobody knows about a company better than its own employees. They know all the customers, revenues, processes, methods, and a lot more.
Hire a few of them and you have all the information.
Don’t ask for all the information directly otherwise you’ll lose your credibility. Make the employees so much comfortable that they’ll reveal all those things by themselves.
This is all, folks.
Ask me anything at @iinnovatemag and I’ll be glad to answer that.