Prove your Competitive Alternative Assumption

It felt like I had been kicked in the stomach.

It was my first startup, which I had been working on for six months when I discovered there was a major competitor in my space. They were at least a year ahead of me and had just raised significant investment. I remember lying on the floor, staring up at the ceiling and thinking ‘What next?’ 

So, what did I learn? 

The first lesson is that my initial competitor analysis should have been more thorough. It starts right at the beginning, during your research and interviews to prove your Problem assumption. By asking your target market how they currently solve the problem, you are likely to have unearthed several competitors that you were not aware of.  

The second lesson is that I should not have been so disheartened. By understanding who else is in the market, you get a chance to push the boundaries of innovation even further. Also, if there isn’t any competition, then you should wonder if you are solving a problem that truly exists.  

So what do you do now that you have your list of competitors? 

For each of these competitors, get a deep understanding of what they offer, and to whom. If you have a long list of competitors, then break them into different categories. The segmentation of those categories should become evident as you better understand your competition. 

For example, I once ran a competitor analysis on an innovative idea I was working on. The list of competitors was long, but after some consideration, I managed to break them into two main categories. There were those that offered a cost-effective, self-serve solution and those that offered an expensive, full-service solution. By understanding that, I understood their target markets. This helped me see who was in direct competition for my target market.  

To summarize, it's important to conduct a competitive analysis early on in your startup journey. Don't be discouraged if you find competitors - it's expected. Instead, use this information to innovate and differentiate your offering from theirs.

Find your Competitive Alternatives