Never skip competitive analysis
How I threw two weeks of work down the drain
Hey, Lior here! Every week, I give you an insider’s view into the world of indie hacking and building products used by millions, with actionable tips on productivity and entrepreneurship. Subscribe below and follow me on Twitter if you haven’t yet.
In today’s issue, I’m going to share:
Why you should never skip competitive analysis
How skipping it cost me two weeks of work
My research on the top tools to find competitors
Competely: my new AI-powered competitive analysis tool (free for a limited time)
Nobody loves doing competitive analysis
Competitive analysis is one of my least favorite parts of the product-building process.
But today, I will cover why you should never skip it, and why you should do competitive analysis early, as an integral part of the ideation stage, even if you’re a solopreneur or part of a small team.
Two weeks of work down the drain 🤦🏻
Recently, I’ve shared with you my idea to build a developer-first tool to generate Terms of Service and Privacy Policy. I was so excited by this idea, as it’s solving a personal pain point for me, that I neglected to do a proper competitive analysis before becoming invested in the idea.
After a couple of weeks of investing in the idea - exploring, designing, scoping, and talking to users, I finally decided to do some competitive research...
To my dismay, as I started to see what’s out there, I found that some existing platforms like iubenda are offering some of the “unique” features I had in mind. Even worse, the more I learned about the products in this market, the more I understood how complicated and nuanced creating Terms of Service and Privacy Policy is, and how much time and legal research was spent building these tools.
As a result, I decided not to pursue this idea since it’s too large in scope for an indie hacking project, and requires significant legal knowledge, which I do not possess and would take months to learn and integrate.
Unfortunately, I wasted two weeks of work - this could have been prevented if I had done competitive research earlier.
Why is competitive analysis important?
In the same way talking to potential customers is important, doing at least a basic competitive analysis is critical - one hour of competitive analysis can save you days or weeks in product development and iteration.
Competitive analysis helps you with:
Validation: ensuring that there’s real problem that people are trying to solve.
Positioning: understanding the competition and finding your unique offering and positioning within that market, so you can focus your efforts.
Defining Scope: which features are table stakes and required to launch an MVP? Which are nice to have and could be added later?
Inspiration: seeing how different companies solve the same problem can inspire you. While I don’t advocate for creating copycats, getting inspired by how others solved the problem can provide insights and inspiration for designing your own product.
Identifying Unknowns: helping you identify gaps in your idea, as well as your perception of the market. While you’ve spent a few days thinking about this idea, other companies spent years, and there are a lot of unknown-unknowns that could be learned by looking at potential competitors.
Why do people skip competitive analysis, then?
I found there are a few reasons why competitive analysis is skipped, especially within smaller startups or projects:
Time-consuming - doing competitive research could take hours or even days, depending on how deep you go. Other things like designing, building, and marketing feel more pressing.
Tedious - let’s face it, competitive research tends to be manual, tedious, and largely boring. Doing other things is more fun, so we procrastinate on competitive analysis.
Dreading the truth - sometimes we’re just dreading what we’re going to find, so to “protect” the idea that we fell in love with, we avoid doing the thing that might invalidate it or require significant changes.
Top tools for competitive analysis
Doing my own market research and surveying 50 professionals, I found that entrepreneurs, PMs, and marketers mostly use the following for competitive analysis:
Digital Marketing Research Tools such as Semrush, Ahrefs, Moz, and SimilarWeb to find competitors and track the amount of traffic they get.
Product Review Sites like G2, Capterra, GetApp and AlternativeTo to identify competing products, and compare feature sets and user sentiment.
Company Databases such as Crunchbase, PitchBook, and CB Insights to get more information about specific companies.
Realtime Intelligence Tools like Contify, Crayon, Owler and Kompote to get real time intelligence and win more deals.
Market research firms like Gartner, Nielsen, and Forrester.
It’s not ideal for everyone
While some of these solutions are extremely powerful and data-rich, you have to work with several of them in tandem to get a complete picture (and most of them are fairly expensive).
You’d have to create a competitive analysis spreadsheet to organize the information and get a bird's eye view of the market. This still means days of research and manual work.
Unfortunately, I couldn’t find anything that would allow an entrepreneur / indie-hacker like myself to perform a quick competitive analysis without spending days of manual work.
Introducing Competely: AI-powered competitive analysis
Based on my learnings throughout this journey, I figured there’s an opportunity to use AI to help with competitive research, and save entrepreneurs, PMs and marketers days of work.
I build Competely, a tool that creates a competitive analysis within minutes with the power of AI. It’s currently free and will become paid over the next week or two.
The idea is not to create an all-inclusive competitive analysis with days of work, but create a great starting point for competitive analysis within a few minutes, which you can then use to dig deeper if you want to.
How to use Competely
Step 1: go to Competely.ai and specify the URL of your product. It currently works best for B2B and B2C software, but feel free to try other types of products.
If you haven’t built your product yet, instead of a URL, you can describe it in a few sentences.
Step 2: Competely looks for competitors for your product, which would take 30-60 seconds. It then suggests a few competitors that you can add in one click, or you can add competitors manually by specifying a URL. I recommend choosing up to 5 top competitors to keep the entire process speedy.
Step 3: Competely does the online research and starts filling up a competitive analysis table, which includes data about the product, marketing, sales, audience, sentiment, and more.
This will take 1 to 10 minutes, depending on the number of competitors you’ve chosen.
Occasionally, some data will be missing. The idea is not to get all the answers (likely impossible), but rather a good overview of your competition, which you can then extend.
What do you think?
Competely is still in early beta, so your feedback will greatly help improve it.
Give Competely a spin and let me know your experience - the good, the bad, and the ugly (send me screenshots too)
Looking forward to hear from you,
- Lior
looks brilliant. Signed up!