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You have an idea for a startup, you’ve put together a team and now you want to find an investment. Your idea is important but your potential investors will probably be even more interested in figuring out whether or not you’re aware of who exactly your competition is. An investor under the impression that you don’t understand who your competition is, or worse – aware of a competitor that you’re not aware of, won’t take you seriously.
This post will teach you how to find your competitor landscape, why you need to and why people are afraid to talk about their competitors.
Why you need to find out who your competitors are?
In short – it will give you the upper hand over them. To compete – and win – versus anybody, you first need to know exactly what you are up against. The first benefit of knowing who your competitors are, is understanding your competitive advantage. What differentiates you from your competition? What are you doing differently and/or better than the rest of them? Knowing this helps your potential investors get a clear picture of your strengths, and/or weaknesses that need eliminating.
The second benefit is closely tied to the first one – it helps you and your investors understand your competitors’ weaknesses. Is there something they are doing poorly which you could be doing better yourself? Learning from their mistakes will help you increase the gap between you even further.
Then, there is learning from all the good things they are doing. Is there a way to use this intelligence to improve your product, or services? Can their practices give your customer support a welcome nudge? Do your investors see how you can improve and grow over time?
Understanding how your competition operates, how they engage with clients, which business models and pricing they are using, as well as the mistakes they are making, is a great brainstorming tool which can help you come up with new and innovative ideas. You wouldn’t be the first one to use such intel to come up with a great new tool that’s solving a real pain point in today’s society.
And finally, knowing your competitors helps you get a clearer bird-eye view of your entire industry. How much funding are they getting? Is the funding going down just a couple of big-game start-ups, or is it spread across the industry? Is the funding growing, or shrinking? All of this can help you determine the strength of the industry and that, in turn, can speak volumes of the demand, helping you position yourself better when it comes to discussing investments.
These are some of the biggest advantages of having detailed knowledge of your competition, and something that is not optional if you are really serious about succeeding with your start-up. So, how do you do it?
How to find your competitor landscape?
There are four main ways to map your competitor landscape: