What is Competitor Analysis?
"If you don't have a competitive advantage, don't compete." Jack Welch
If you only have a strategy for winning regardless of your competitors, you will fight an uphill battle.
Competitor analysis is an evaluation of the strengths and weaknesses of your competitors. Most startup co-founders do not conduct a thorough competitor analysis systematically enough. Too often co-founders rely on generic impressions and their "gut feeling." There are two common mistakes co-founders make when evaluating the competition:
- Co-founders focus on competitors who are solving a different problem than the solution of what their product solves.
If you are familiar with the jobs to be done framework, this shift helped McDonalds realize that their milkshakes were competing against bananas, bagels, donuts, and Snicker's bars. The competitive landscape became more precise (and profitable) once they learned they were not just competing against Burger King, Dairy Queen, and Chick-Fil-A.
- Co-founders evaluate the competitors they know about, not the competitors fighting for their customers' wallet.
We've found between 20-30% more competitors the customers know about than co-founders are aware of. And another 20-30% of competitors the co-founders know of that their customers have no clue who they are. That's a difference of 50-85% of competitors!
As a result of bad competitor analysis, this places your startup at the risk of dangerous blindspots your competition can use to their advantage.
Here Are Our Articles on How to Do Competitor Analysis for Startups: