Tips on Analysing Competition

Analysing competition is an important step when assessing a startup idea. Competition prevents a product from realizing it’s true value.

There are broadly 2 areas we should focus on while analyzing competition.

Current Competition – This includes all startups which are doing the exact thing you are looking to do. A Flipkart and an Amazon are direct and current competitors as they are both horizontal ecommerce marketplaces.

Potential Competition – Here we need to assess how easy it is for a current startup to do what you intend to do. Thinking through this helps a startup assess and identify an advantage which will make it sustainable in the long term. For example in Beveragewala, we were building an ecommerce store for teas and coffees. We realized that for horizontal players like Amazon, entering this space was very easy and doable. 

Stop Comparing your Startup with Others

If you are running a startup, please stop comparing it with others. You will be doing great favour to yourself, will have less clutter in your head and certainly will make better decisions.

I have met way too many startup founders and I myself have been guilty of doing this. We compare the growth rate (which every one lies about anyway), how much money someone has raised (again people lies and you never know the terms anyway), how many people a startup has (judging growth of a startup by how many people they have is like judging the taste of cup of tea by just looking at it) and so on.

It is stupid to compare your startup, your product, your team and yourself with others since you will never know who others are. Building something because others are building, hiring someone because others are hiring, raising money because others are raising is extremely stupid. You build your startup the way you want it and let others build their startup the way they want it.

There will always be startups who is doing better than you, this is how business and life works. So stand aside, appreciate others but don’t judge your startup from others parameters.

(taken from gaikwad.in)

Analyse competition well...

When you think of a need of a particular set of users, it is important to analyse how those users are managing now. We should assess all companies who are currently satisfying or come close to satisfying the need and analyse how we intend to offer something different and incremental to their products. This step is extremely crucial as at times, we tend to not consider all the competitors and this may result in us making a product which is similar to one existing now and hence having no sustainable advantage going forward.

This happened to me in Beveragewala. We were creating an 'Amazon for Beverages' without realising till very late that Amazon had also started selling beverages :(. At that point, we had already burnt a lot of money and had no significant competitive edge and had to close down.