When innovating and developing new products or services, analysing the competition is an essential process but one that can be fraught with anxiety. Especially when you’re in this early development stage, seeing what your competitors are achieving can paralyse you.
Some companies, it seems, are offering everything and the kitchen sink to secure the loyalty of their customers. Think about the last time you signed up for a phone service and the salesperson mentioned all of the ‘add-ons’ that you know you’ll never use. If you only have the one product, say, a phone line rental, how do you compete with someone who can offer all these extras?
As I’ve highlighted previously, having a start-up mentality means approaching it differently to how an existing organisation would in a proven market.
Let’s say you have an innovative idea and you think you’re on to a winner because you’ve Googled it and cannot find a competitor with a similar offering to you.
The reality is:
- You are fooling yourself. There is competition out there, perhaps they are holding on to their resources until they’ve refined their product/service; or
- There is no competition because there is no market need.
What happens if you did an initial search and you found that your brilliant idea was already being offered in one form or another? Don’t let this put you off too quickly. This is actually a good sign; it means that a market and your idea has been validated.
If this is the case, ask yourself why would a customer chose my product over a competitors?
A common trap is to find out all of the features the competition has and try and incorporate them, and more in to your product – don’t. Don’t be fooled by those charts comparing two products in terms of the number of features they have. Your product needs to offer a solution, and many of the bells and whistles you are trying to add may not be valued by customers.
If you have been validating your business idea by talking to potential customers, as outlined in my last post, and you have been asking the right questions, chances are you have been given a clear idea of your market’s needs, including how you competitor is performing. But, were you listening? Here is a checklist of questions for your potential customers:
- What is their biggest issue?
- How do they currently solve this problem?
- Who do they currently rely on to provide a solution?
- Who else do they know is working on fixing this problem?
- What solutions have they come up with themselves?
- What is lacking that they are not being offered at the moment?
And most importantly : which features do they consider the most valuable? Concentrate on finding a way to give them something they’ve never been offered before, and are seeking.
When asked about how you will attract users to your product over your competitor, the answer will not be ‘an extensive list of features’, it will be about how you have differentiated yourself by providing the better solution which customers have told you they value and genuinely need.