Don’t Just Read About It, Use Your Competitors’ Products
If you’re doing a competitive analysis, you’re probably looking at the same stuff as everyone else. Data sources like CrunchBase or AngelList provide some great top level intelligence. But to get to the next level of understanding you MUST use your competitors’ products.
I know — it will hurt on the inside when using them and handing them your hard-earned cash all the while developing a competing product. But there is an outrageous number of folks pitching about competitors they’ve not properly investigated.
It’s easy to understand how this is a deal breaker for investors. If you’re not willing to even use a few hundred dollars worth of competing services, why should they be willing to hand you thousands. This is called “skin in the game” and it shows personal investment. I’ve heard of investors asking “are you all in?” They’re asking if you’re totally committed. If you’ve got all your cash in this, then you know you have to make it work.
Overcoming this objection is easy. Make a list of your biggest competitors. Let’s say you’re a food delivery startup. There are plenty of players you can test. Grubhub. Delivery Hero. UberEats. This is the fun part — order up some pizzas! (Of course you have to tailor this to the specific segment you’re operating in).
The key to this is more than just sitting back and enjoying that pizza. You need to document every step of the process. I find recording it on my phone helps. Write down the good and the bad, and importantly, record the voice calls if you’re placing any. Try to view everything very objectively and question every button click.
Finally, this gives you a great excuse to ring the startup — I find there are two narratives that work really well. Firstly, you can ring them to give them “feedback” — every company loves feedback and will likely be very receptive. Ask them about the service after giving them good feedback. Ask them where they are planning on taking the service or product.
The second narrative is that you’ve got an issue — if you need to extract information about a certain feature you can say it’s broken. Then get them to walk you through it whilst asking questions about the process.
At the end of the day, the startups that succeed are the ones that do what others don’t. You have to know the industry and your competitors inside out; and to do this you, may need to hustle a little!