Introduction: Competitor Research

Questions answered in this module

• Why should I do competitor research?
• Which competitors should I study?
• How do I find the right competitors to study?
• How do I leverage competitor research for growth insights?

Overview

Many founders think competitor research is important for staying ahead of rival companies. That’s true—but early stage companies don’t need to worry about losing customers if they’ve never had them in the first place.

Instead, competitor research matters because you can use it to grow your business. Specifically, you can use competitor research to:

• Validate your growth strategy. Researching companies similar to yours can help fast-track major growth decisions. Chances are, whatever business model or acquisition channel works for them could work for you.
• Disrupt the market. By studying established competitors, you can find new ways and opportunities to compete against them. Consider how Netflix went from mail-order DVD rentals to online streaming to edge out Blockbuster.
• Guide your product messaging and value props. When you understand how competitors market their brand and product to customers, you’ll be better able to differentiate yours.
• Identify and vet growth experiments. Source new growth ideas based on what you observe in your competitors’ strategies. Depending on the competitor, you may have more certainty that a specific tactic will or won’t work.

All are crucial for accelerating your growth, but we’ll cover the third and fourth bullets in more detail in our Value Props and Experimentation modules.

You can, of course, also leverage competitor research for product insights. However, since our program focuses on acquiring customers, we won’t dive into competitor research for product development. Instead, we’ll focus on how to find the right competitors for growth insights and how to actually do the research.

Why do competitor research?

Well-established competitors have tested maybe dozens of iterations to find the best ways to grow their companies. You can get these learnings in a much shorter time if you know where to look. Even better, doing this research is relatively cheap, making it a low-cost way to get growth guidance and source ideas.

That said, there’s one big caveat:

Competitor research shouldn’t replace your own experimentation and customer research. No matter how similar your product and business model are, there’s no guarantee that what works for one company will work for yours.

Not to mention, you can’t perfectly recreate all growth strategies, especially from older companies. Many businesses found early success using techniques and ad channels that are much more saturated today.

But the goal of competitor research isn’t to clone someone else’s successful business strategy. It’s to understand at a macro level what worked for companies similar to yours so that you can better prioritize the growth channels with the most potential. While you can’t replicate your competitors’ results, you can get more conviction about which strategic direction to move in.

One final note before we dive in:

Don’t spend too much time doing this research. Take notes on your findings, but don’t put together a comprehensive research report. Instead, take the next step and act on your findings.