Industry Analysis for Startups - A Practical Guide
The majority of startup founders prefer to do their research on other small enterprises. It seems self-evident when considering businesses that are just getting started (as they are), have comparable finances, and lack exceptional brand awareness.
Founders expect that it will enable them to outperform their nearest competitors in tactical performance — and, at some time, it will. Market research for startups, like any other business, should begin with the identification of the companies to be analysed.
Take note that the list you create will evolve. When undertaking pre-launch research, the businesses you look up to may differ from those you choose for future rival monitoring.
However, enough theory — let us now go on to practise.
Determine the market’s most formidable competitors.
Consider that you are launching a feature management platform. You are aware that the niche has at least one visible player. Rest assured, this is sufficient to begin investigating all of the competition. SEMrush Market Explorer, for example, can assist you in compiling a lengthy list of organisations who target the same audience online.
These include the following:
● direct competitors who offer similar products and services to the same clients;
● indirect competitors providing unique solutions to a similar audience;
● or even organic competitors that may be in a completely different sector but are vying for online visibility in SERPs with your website.
The latter may be particularly intriguing if you’re conducting market research for your firm, as these domains can syphon a sizable portion of organic traffic away from your site. If they do, you’ll need to critically examine their marketing plans and approaches.
Expose the market’s trends and averages and contrast them with the dynamics of the strongest rival.
Many industries, from hospitality to online education, have regular peaks and valleys in demand, yet firms must remain afloat regardless of volatility.
It’s considerably more safe to survive the low season when you know when to anticipate it and what type of marketing assistance you may require. For the time being, focus on one additional broad industry trend — the top digital marketing channels for niche firms.
Evaluate your chances of breaking into the niche.
Examine the online market shares of the leading rivals. Are there numerous competitors vying for an equal share of the pie? Or is there a dominant figure attracting the majority of the attention, while the rest of the participants receive merely crumbs? Determine the ease with which you can enter such a market based on the graphs.
Consider more factors. While it is critical to understand market prospects and your own business’s strengths, it may be even more critical to keep an eye out for potential threats and entry obstacles.
These may include the following:
● new entries (pay close attention to the bottom of the SEMrush Market Explorer’s Relevant Sites list to see how they gain their online market shares over time)
● replacement items or services for your solution
● local players that you may be unaware of if you view the competition globally
● cultural differences, language barriers, and logistical problems.
While you may wish to investigate each of these things in further detail later, you should be aware of them at the outset to avoid definite failure.
