By Kate Sackman
“The purpose of a competitive analysis is to get insights about yourself.”
-Rhys Ryan, serial digital entrepreneur and graduate of Empower Accelerator Cohort 4
Even though you think your startup company’s product is unique, it’s not. Ok, you may be one of the rare creatures in the universe that has a monopoly technology. If so, that’s pretty cool. But never assume that is the case. If you’re like most people, you definitely have competitors.
In the Empower Accelerator at StartUP FIU, we frequently see entrepreneurs who either 1. believe they have no competition, or 2. totally underestimate the competition. By the end of our 14-week program, however, they understand their competitive risks, including especially that it is likely larger companies will try to compete with them and probably have already initiated an effort to develop and sell a similar product.
Who is your competitor? Look at what your potential customers are doing now to address the problem you want to solve. If you want to create a digital tutoring service, your competition is live tutors, schools, Kahn Academy and other online courses, books, libraries, tutoring centers. You get the idea. Perhaps no one has a digital tutoring platform right now, but who are the digital education companies that could enter that space? They probably have very deep pockets and could enter the market quickly, blowing your market share right out of the water.
In order to do a useful competitive analysis, you need to complete your deep, in-person end-user research. See my previous blog on this topic or use any thorough method that appeals to you, but don’t take any shortcuts. End user research is your foundation and it must be solid as a rock.
Finally, never underestimate your competition. A thorough competitive analysis starts with reviewing every bit of information you can dig up – Google searches can come up with contracts, pricing, and all sorts of tidbits not available on the competitor’s website. Then analyze how satisfied people are with the competitors’ products. Map the structure of the market and notice the features and benefits around which the competitors cluster. Identify your unique offerings (features, functions, benefits, customer service, etc.). Then describe your competitive advantage using the language of your own customers. Ultimately, customer research is about understanding how you stand out. Make it work for you.
About Kate Sackman
Kate directs the Empower Accelerator at StartUP FIU and is a serial entrepreneur with industry experience in software, medical devices, media, environmental science, marketing and finance. She believes powerfully in the potential of passionate entrepreneurs when their energy is focused and persistent. As an adjunct professor at FIU, she teaches Global Social Entrepreneurship in the Honors College and Technology Entrepreneurship to master’s students in the Engineering school. Since joining FIU in 2016, she has truly enjoyed helping over 100 start-up founders innovate in all areas of strategy, business model, funding and pitching.