10 common startup mistakes: #4 new solution = no competitors

September 14, 2017 by Lee Erickson
The forth installment of a 10 post series on common startup mistakesMistake 1, 2, 3, 4, 5, 6, 7.

Being unique doesn’t mean you don’t have competitors.

Over the years of asking entrepreneurs who their competitors are, I often got the response, “Nobody does what I do. Most companies only do X but I do X, Y, and Z.” Or, they claim that this is a totally new idea that has never been done before, so there really aren’t any competitors. I’ve heard this from startups as well as CEOs of existing businesses.

While you may have indeed created a one of a kind solution, you do go head to head with others in terms of competing for your customer’s time, attention, and money.

It’s not about what your solution does. It about who, or what, your target customer turns to as a potential way to solve their problem or meet their need. Knowing what other solutions your customers use (or could use), is key to helping you identify the value that you can provide that others don’t (or can’t).

  Competition is always a good thing. It forces us to do our best.
~ Nancy Pearcey

How do I identify all my competitors?

Ask potential customers.

While you’re asking questions of potential customers to learn more about the problem/need that they have, also ask them about how they are currently trying to solve the problem.

What have they already tried? How’s that working for them?

In fact, you can learn a lot from people who have already solved the problem in terms of where they turned, the value they received, and the value that they may be missing.

Google what your customer would.

A great way to find potential competitors is to get inside your customer’s head. Think about what they would do to find a solution to their problem. Then Google it. Look at both the natural search results as well as the ads.

See what others say about them.

You can also learn a lot from what others are saying online. Google reviews of your competitor’s products and their customer services. Look for reviews from credible sources such as industry report or influential bloggers.

Compile and compare.

For each competitor makes notes about:

  1. The products/services they offer.
  2. How the product actually works (sign up for it, download it, try it out).
  3. What claims they make (benefits, value, “secret sauce”).
  4. What their main message is (typically big and bold on the home page).
  5. What others say about what they offer.

This is critical if you are going to be able to sell against them. Having this level of knowledge about potential competitors allows you to more easily identify potential opportunities (i.e., where you can fill a gap that others have missed).

Resources to check out:

There are a number of resources that you can use to help you manage the friend/co-founder relationship:

COMING UP: MISTAKE #5…building something = progress

Apply to our summer program now.