How to Run a Successful Start-up by Researching Your Competitors
One of the most essential steps for running a successful start-up is researching your competitors. By doing so, you can gain valuable insights into your target market, your competitive edge, and your potential customers. In this article, we will show you how to identify, analyze, and use your competitors’ insights to improve your start-up’s strategy and performance.
How to identify your competitors
The first step of researching your competitors is to identify who they are. There are two types of competitors: direct and indirect. Direct competitors offer the same or similar products or services as you do and target the same audience as you do. Indirect competitors offer different products or services but still solve the same problem or satisfy the same need as you do.
To find out who your direct and indirect competitors are, you can use various methods, such as:
Searching for keywords related to your product or service on search engines and see who ranks high on the results page.
Browsing through business directories, such as Crunchbase, AngelList, or Product Hunt, and filtering by industry, location, or funding stage.
Asking your existing or potential customers who they currently use or consider using for their needs.
Look at social media accounts, blogs, podcasts, or newsletters of influencers or experts in your industry, and see who they mention or recommend.
Use competitor analysis tools, such as SimilarWeb, SEMrush, or SpyFu, to get a comprehensive list of your competitors’ websites, traffic sources, keywords, and ads.
Once you have a list of your competitors, you can categorize them into different levels of threat, such as:
Major competitors: These are your closest competitors with a large market share, a strong brand identity, and a loyal customer base. They are the ones you need to watch out for the most.
Secondary competitors: These are your less threatening competitors who have a smaller market share, a weaker brand identity, or a different target audience. They are the ones you can learn from and differentiate yourself from.
Indirect competitors: These are your potential competitors who offer alternative solutions to your customers’ problems or needs. They are the ones you can collaborate with or acquire.
How to Analyze Your Competitors
The second step of researching your competitors is to analyze their strengths and weaknesses. By doing so, you can understand their competitive advantage, their value proposition, and their customer satisfaction. To analyze your competitors, you need to look at various aspects and metrics, such as:
Business model: This is how your competitors generate revenue and deliver value to their customers. You need to understand their pricing strategy, their cost structure, their revenue streams, and their profit margins.
Marketing strategies: This is how your competitors attract and retain their customers. You need to understand their marketing channels, their marketing mix, their marketing campaigns, and their marketing goals.
Product or service features: This is what your competitors offer to their customers. You must understand their product or service quality, functionality, design, innovation, and differentiation.
Customer reviews: This is what your customers say about your competitors. You need to understand their customer feedback, ratings, testimonials, complaints, and suggestions.
Online presence: This is how your competitors appear on the internet. You must understand their website performance, content strategy, social media presence, search engine optimization (SEO), and online reputation.
To collect and compare these data points from your competitors, you can use various frameworks or models, such as:
SWOT analysis: This is a simple but effective tool that helps you evaluate the strengths (S), weaknesses (W), opportunities (O), and threats (T) of each competitor.
Porter’s five forces analysis: This is a more advanced tool that helps you assess the competitive landscape of your industry by looking at five forces: the threat of new entrants (N), the threat of substitutes (S), the bargaining power of buyers (B), the bargaining power of suppliers (P), and the rivalry among existing competitors ®.
Value proposition canvas: This is a customer-centric tool that helps you understand how well each competitor delivers value to their customers by looking at two elements: the customer profile (CP) and the value map (VM). The customer profile consists of three sub-elements: the customer jobs (CJ), the pains (P), and the gains (G). The value map consists of three sub-elements: the products and services (PS), the pain relievers (PR), and the gain creators (GC).
How to Use Your Competitors’ Insights
The third step of researching your competitors is to use their insights to improve your own start-up’s strategy and performance. By doing so, you can leverage their strengths, avoid their weaknesses, exploit their opportunities, and counter their threats. To use your competitors’ insights, you need to apply the findings from your competitor's research to your own start-up’s strategy and performance, such as:
Product or service development: You can use your competitors’ insights to enhance product or service features, quality, design, innovation, and differentiation. You can also use them to identify and fill the market gaps or the unmet needs or wants of your customers.
Marketing and sales: You can use your competitors’ insights to optimize your marketing channels, marketing mix, marketing campaigns, and marketing goals. You can also use them to refine your value proposition, your pricing strategy, your customer segments, and your customer acquisition and retention methods.
Business growth: You can use your competitors’ insights to identify and pursue new opportunities for business expansion, such as entering new markets, launching new products or services, forming strategic partnerships, or acquiring other businesses.
To help you with this step, you can use some tips or best practices, such as:
Benchmarking: This is a process of measuring and comparing your start-up’s performance against your competitors’ performance using key performance indicators (KPIs), such as revenue growth, customer satisfaction, market share, or conversion rate.
Content analysis: This is a method of examining and evaluating your competitors’ content strategy, such as their website content, blog posts, social media posts, newsletters, or podcasts. You can use this method to learn from their best practices, avoid their mistakes, and find content gaps or opportunities.
Actionable insights: These are the specific and practical recommendations you can derive from your competitor's research. You must prioritize and implement these insights based on their impact and feasibility.
Researching your competitors is a crucial step for running a successful start-up. By doing so, you can gain valuable insights into your target market, your competitive edge, and your potential customers. In this article, we showed you how to identify, analyze, and use your competitors’ insights to improve your start-up’s strategy and performance. We hope you found this article helpful and informative. If you want to learn more about how Wealth VP can help you with researching your competitors and growing your start-up, please visit our website or contact us today. Thank you for reading! 😊