2.3 Analyse your competition
Now that you have identified a problem you want to solve, it's important to understand the competitive landscape.
It’s important to understand that competition isn't necessarily a bad thing. In fact, it shows that customers are willing to pay to have their problems solved. However, it's crucial to understand how these businesses solve their customers' problems and how you can differentiate yourself from them.
If you simply do what others are doing, marketing your product and convincing customers to join your unknown business will be extremely challenging. This is why we started by identifying your unique insights, as this will help you differentiate from the competition.
There are many ways to find competitors. Here are some of the most common approaches you can follow.
Search on Google from the view of your customer Every search begins with Google. Therefore, it's important to put yourself in the shoes of your customers and search on Google for what they would look for in order to solve their problem. The search results will reveal all the businesses that could help your customer to get their problem solved, including your competitors.
Keep in mind that there are two types of results: normal search results and paid ads. Both are relevant and can point to different types of competitors.
Normal search results are websites that rank on Google without anyone paying for it. These websites rank organically and may show established businesses in the market. Otherwise, they would not rank at the top.
Paid ads may point to competitors that recently entered the market, as they are willing to pay Google to promote their product.
Lastly, it's important to note that Google will always show personalized results. Therefore, consider switching to incognito mode in your browser to get unbiased results.
Lookup industry and market reports Industry reports provide a concise summary of the current state of an industry and its competitors. Many research companies, including consulting firms, publish these reports on a regular basis and make them freely accessible. You can search for these reports directly on Google. Additionally, you can visit the following firms' websites for insights:
Keep in mind that these research firms typically focus on established businesses and markets. Therefore, while some insights may be valuable, you are unlikely to find information on the latest trends and emerging businesses.
Read through forums to identify competitors Forums are a popular platform for people to address problems and get advice from the community on how to solve them. This is a wonderful way to learn about competitors that others consider worth sharing.
You can find smaller forums that discuss your specific industry, but you could also start with the two largest forums that exist: Quora and Reddit. I'm confident that they have answers to the problems you're trying to solve.
By the way, such forums are not only great for identifying competitors but also for learning about what they are doing well and where they fall short.
Analyse relevant competitors more closely
Once you have generated a good overview of the competition in your market, analyze some competitors more closely. Focus your analysis on relevant competitors. In the end, you want to look at and learn from the winners. There is not much to learn from the losers, except what you should not do.
To identify successful competitors, look for those that experience the most traction. Such traction can come in different ways, including:
- Large market share
- Fast growth
- Major investments
- Going viral and media attention
Simply go through the list of your competitors and ask yourself whether the businesses you have listed experience such traction. If yes, put them on your shortlist to analyze them more closely.
To analyze relevant competitors more closely, create a simple table, as illustrated below, and go through the questions stated in the rows.
If you want to analyze certain competitors more closely, you may want to consider the following strategies to generate in-depth insights:
Analyse recessions of competitors Your competitors' recessions are a valuable source of competitive insights. By reading honest feedback from their customers, you can better understand their strengths and weaknesses from a customer's point of view.
You can find recessions on websites and apps such as:
Also, consider checking other sites. For instance, if your competitor is selling on eBay or Amazon, take a look there too.
Analyse the website traffic of competitors Analyzing the traffic of a website can provide valuable insights. You can see which keywords bring users to your competitor's websites, and therefore, what their users are searching for.
You can also examine the ads they run and how well they perform. This way, you can understand which messaging works to attract what kind of customer through which marketing channels.
Last but not least, you can determine whether they experience any traffic at all, and whether they are as successful as they appear.
To conduct a website analysis, you can use one of the following tools: