Believe in your own strength. But first check out the competition.
A few years ago I asked a starting entrepreneur — who was developing a kind of digital mailbox — who his competitors were. “I believe in my own strength,” he said after a short pause. “Great, but does your target audience do that too?”, I asked. Competition analysis is a great source of opportunities.
If you have a great idea, which gives you a lot of energy and promises a great future, you would like to believe that you are the first and — most importantly — the only one with that idea. So the last thing you’re waiting for is someone telling you without even looking up from his computer, “Oh sure, that already exists and it’s called Flooopsy.com.” Then the idea suddenly changes from a sweet dream into a harsh reality with tactical limitations and opportunities.
It is therefore fully understandable that the starting entrepreneur or intrapreneur in a corporate setting will not directly immerse in a competition analysis. That will come later, let’s first finish the Lean Canvas. And let’s also get started wit the design, because that is the fun part.
There are very few startups that can blindly draw the entire competition playing field on a whiteboard after a month or two when I ask them who their competition is. In my experience those are the (corporate) startups that are most likely to succeed.
And I think that in a full day on Google you already have 80% of the competition in the picture. So you can get started right away. But there is more, and I have six reasons why the extra time you put into competitive research is worth it. I keep telling my colleagues over and over, and I also like to share them with you.
1 “Why not?”
Suppose you don’t find any competitor. Nothing that comes even close. While everyone told you when you revealed your nifty concept: “What? That sounds so logical! Are you sure that doesn’t exist, yet?! ”
You probably felt like some Da Vinci, but now is the time to ask yourself, “Why not?”
That question is often difficult to answer, because something that is not there is of course difficult to study.
If your idea survives the answer to that question, then you might be on to something. And ‘nobody will simply have come up with the idea before’ is often not the right answer, unfortunately.
2 The Client Alternative
Often — especially when you introduce a new product category such as the Ipod — in addition to similar products, there are also the client alternatives, as they are called in the Lean Canvas. A competitor of Senz Storm umbrella is the Impliva, but a client alternative to a Senz is a rain suit, a disposable umbrella or just getting soaked over and over again. Customer alternatives are often overlooked, while they often have a huge ‘market share’ and serve very different pains and gains.
3 Problem Fit: check!
If there are ten competitors who are successful and already have a working and selling solution, you can see that as confirmation of the Problem Fit. After all; if getting wet in stormy rain hadn’t been a problem, the storm umbrella wouldn’t have been this successful.
“Nice, then we can conclude Problem Fit”, you might think. Yes and no, because if you become the eleventh supplier on the market, how will you gain an ambitious market share?
Indeed, by offering the best solution to the problem. And you do that, for example, by solving the shortcomings of the other competitors. You will learn what these are in… the Problem Fit phase. So it is actually time for a bit of proper problem validation. But this time you know what to look for, and you have an advantage: ten MVPs have already been built for you.
4 The cheapest 80% MVP
If you find a competitive and somewhat similar product or service that is already on the market, you have a free MVP to test how the similarities with your idea work out in practice. You search for users, ask if you could observe how they use the product, what they think is good and bad about it and you immediately learn a lot about how it can be improved.
As for that storm umbrella: that little button suddenly pops off after a few times, and you lose in the stormy rain. Room for improvement!
5 The Hare
In dog races, a mechanical hare is running along that goes just a tiny bit faster than the fastest dog. It helps to get the dogs run as fast as they can.
Same goes for Startups. When there is already some competition, you can often get a grip on how such an initiative is doing, what the size of their team is and how much funding they have raised. That tells you something about the possible success, and might set a nice benchmark for your growth in the coming period. So stop barking and go after it!
6 What are you going to talk about?
Suppose you have reached the Market Fit phase. What are you going to talk about when you start marketing your product? About your Unique Selling Points, probably. But if you don’t know what the similarities are with the competition, you also can’t tell what the differences are. And in positioning, these points of parity and points of difference are crucial.
With the first you define the category, so that people understand which jobs to be done your product or service solves: ‘Ah, a storm umbrella!’
With the differences you explain why the target group should buy your product. ‘Dry in three minutes’, ‘20% more surface’, ‘no buttons’ and so on.
And how about believing in your own strength?
I am convinced that believing in your own strength is a requirement for performance. If you yourself don’t believe in it, why on earth would your target audience? But next to that being an expert on your competition is inspiring as well as crucial to know how to score.
Because in the end the target audience doesn’t care about your dreams, your future and your ego. In the meantime, they simply choose what they think is the best offer.