Defining your startup's competitors
Let's talk about competitors. In 99.99999% of the cases, if you've thought about something, someone else already has too, and most likely even already built a product or service. Therefore, you'll be competing with these individuals and companies, so that potential customers buy your product and not theirs. To compete, you'll need to understand your competition and how you are different to it (Part 3, Block 4: Unique Selling Proposition). Let's start with the competitive overview.
What are Competitors?
Competitors are individuals or companies who with their products or services are solving the same problems as your startup does.
Why are Competitors important?
Looking and studying competitors early on is super important. It gives you an overview and a benchmark of what the customers are used to.
Product benchmark: by looking at the competitors' products you can identify the best and worst practices for your own product
Revenue Model benchmark: you can get inspired by looking at the revenue models of your competitors
Pricing benchmark: competitors' pricing gives you an overview of how much customers are willing to pay to solve a problem
Fundraising benchmark: It's also useful to check out how much funding they have raised. Fundraising is a good indication of the investors' interest in certain types of new startups.
Once you know your competitors, you can identify how you are different to them and what your Unique Selling Proposition is (Part 3, Block 4: Unique Selling Proposition).
Finally, investors always want to hear about competitors! They prefer a market with few competitors or a strong differentiation to show that you can get a market share.
How to analyze Competitors?
1. Desktop research
Start by gathering up a list of your competitors and their websites in one place. You can always return to this list and update it as you find new competitors and information along the way.
2. Competitor analysis
To analyze your competitors, look at each one of them to define the following information from Framework: Competitors. Of course, you are free to adjust the information. Moreover, you can do it in an Excel sheet, so that you have the whole overview in one place.
Competitor analysis is not a one-time thing. As you further develop your startup, you'll identify new competitors. Maybe, you'll also pivot and some competitors will not be relevant anymore, while new ones will. Therefore, don't forget to always update and have the latest information on them.
Finally, it's not enough to just know the competitors. You need to understand why you are different to them. Find out how to define that in the next Block.