If you don’t know what your competitors are doing, you may as well be shooting in the dark when it comes to making marketing decisions. Did you know that 40% of startups fail because there wasn’t any market need? That’s two out of every five.
Without market research, you’ll spend money on promotions that may not even reach the right end user. And as a startup, you can’t afford to waste money like that.
Now that you’ve got an MVP, it’s time to move on to competitive research.
Why prioritize MVP competitive research
At the end of the day, no matter how good of a product you think you have, if it doesn’t sell then you don’t have a business.
That’s why you need to create a great minimum viable product, or MVP. An MVP means releasing a product as fast as possible with the minimum functions required to have something usable. The idea behind releasing an MVP with only basic functions is to get customer feedback as soon as you can. That way, you can start learning what customers actually want instead of trying to guess.
Doing competitive research shows you how your competitors are already serving your market. You can benefit from the work they’ve done and save yourself from starting from scratch while still creating an MVP that improves on what’s already available. You need a targeted customer product—and competitive research helps you better target your ideal customers.
Understanding the benefits of competitive research
As we mentioned, competitive research involves seeing what your competitors are doing with the market. Many small businesses think they need to reinvent their ideas completely from scratch. But trying to do that creates tons of unnecessary work that can really bog you down.
By doing competitive research, you can instead understand what’s already working, and then use that as a starting point to offer something better.
Conducting competitive research analysis makes it easy to see industry trends in action as well as gaining some industry insight other competitors may not have.
Steps of competitive research for MVPs
Step one: Scope it out
In step one, you’ll go through what we call the scoping phase. When our team at VeryCreatives helps our clients, this research is necessary to create a clear scope for MVP creation.
The first part of your research is creating a framework. Because there’s so much data available online, you want to narrow your parameters so your search efforts are only spent on combing through useful results.
Frameworks generally consist of the following data points:
- Competitor’s company name
- Website
- Value proposition / Positioning
- Company mission, strengths, and weaknesses
- Brand differentiation
- Products and services offered
- Traffic generation
- Monetization methods
- Business model
- Apparent customer
Make a copy of our competitive research template, and start the process.
Step two: Examine your competitors
In step two, it’s time to start looking at your competitors more closely. You’ll want to take notes about your competitors on their own, and also pay attention to any patterns that arise.
Do most of your competitors have specific sections on their websites that aren’t there for other industries? Do they tend to favor a specific social media platform over another? These are both hints of customer preferences you’ll want to examine more closely.
Step three: Get to know your competitors
For step three, you’ll need to pick some of your competitors to analyze. See how your competitors deliver on the promises they make. How do the efforts of giants in your industry differ from the small fry? How can you position your brand in a way that hasn’t already been done by your competitors?
How can you position your brand in a way that hasn’t already been done by your competitors?
Step four: Re-examine your competitors each quarter
Finally, you’ll want to update your overview each quarter so you have up-to-date information that you can use to pivot your business and keep up with your industry.
Our VeryCreatives team heavily relies on competitive research as one of the first steps taken in the MVP creation process. We help our clients understand how competitor behaviors can improve what they have to offer to the industry.
Don’t be afraid to use your competitive research tools
Sometimes it’s hard to determine the demand and interest of a potential product. Use your tools to access information that’s already available, if you know where to look.
Helpful tools include things like web audits, Google alerts, public government records, business databases, and anything else at your disposal.
Using your tools lets you see how your competitors are interacting with your potential customers on the web. You’ve basically already got the data you need for dozens of case studies—just with other companies in the industry.
Competitive research can make or break your MVP
While it might feel tempting to skip over competitive research to create the product you wanted to offer, not doing it can mean the difference between a successful startup and a business loan you can’t pay.
All of the steps listed above are just one area of your product strategy. If you want to learn more about other parts of an effective product strategy process, check out this post outlining key components of a product strategy you’ll want to include.
