When we have an idea for a new product or business, we get excited, and often the first thing we want to do is to get started building it. But unless we lay the groundwork properly, we might eventually find that all our efforts have been misdirected. One of the first things we need to do is to scope out the competition — determine what similar products or services already exist or have existed and how they’re similar to or different from what I want to create.
Let’s say the new product I want to produce is a round blue metal widget. How do I figure out what other round blue metal widgets already exist on the market, or have existed but failed?
The limits of a Google search
A natural first step is to do a Google search, and while that’s certainly not a bad idea, it will only get you so far.
For one thing, how many pages of Google search results are you prepared to look through? Sure, reading through the first page or two may alert you to the existence of some competitors. But are those competitors the most relevant competitors, or are they the competitors who have invested most in search-engine optimization? What if your most important competitor hasn’t invested in SEO at all, and so their webpage — if it even exists — appears on page 53 of the Google results?
Then you might start looking through industry lists. First you search for manufacturers of round blue metal widgets, but you find none. Then you search for makers of round metal widgets (you find 397) and makers of blue metal widgets (you find 209). How do you determine which of those are potentially your competitors and which of them are not?
Because the real problem could lurk elsewhere, you’ve got to talk to people; a handful of companies are already making round blue metal widgets, and they are dominating the fledgling round-blue-metal-widget market, but you don’t know that.
Conversations yield discoveries and insights
At The SearchLite, a lot of our work consists of research — both secondary research (searching for, reading, sifting through, and synthesizing information) and primary research (conducting interviews). Often, we find that the best information doesn’t come out until we start diving into the primary research. Conversations with people in the industry can turn up surprising information.
Someone in the industry tells us, “Hey, you really ought to talk to the people at XYZ Company. I hear they’ve been buying amazing round blue metal widgets from BlueWidgeco.”
So we call the people at XYZ company, and we hear something we weren’t expecting: “Yeah, we got round blue metal widgets from BlueWidgeco. We were really excited about them at first, but then in actual use, they didn’t work for our needs because they were incompatible with our robots. What we really need is a round blue metal widget that’s compatible with our robots.”
Now we have two valuable pieces of information: that BlueWidgeco is a competitor and that at least one company finds that BlueWidgeco’s round blue metal widgets don’t work for their application.
What the competition says about me
It just so happens that the round blue metal widgets that BlueWidgeco makes are exactly like the ones I was planning to make. So now I need even more information: How well is BlueWidgeco doing? How satisfied are their other customers?
As I continue talking with people in the industry, I need to find out who else is making similar items. I need to find out how those things are different or the same. Then I need to figure out how I’m going to differentiate my round blue metal widgets from the others on the market. Do they offer some unique value proposition?
The more people I talk with, the more previously undiscovered competitors I learn about. At some point, it may become apparent to me that although there are competitors, there is a clear unmet need in one area — but to meet that need, I’ll have to make a small change to my product concept. Or, on the other hand, I may reach the point where I need to ask myself, “Is there really enough room in this crowded market for yet another similar product?”
Obviously it’s better for me to reach that point before I’ve invested huge amounts of time and resources into producing it. “Just google it” may be not be enough.
We often find that the best information doesn’t come out until we start having conversations with people in the industry.
