How Did They Do It and How Are We Going to Do it Different?

by Kathy Seaton

Entrepreneurship is not a pass time. In fact, the thought of building an empire is all consuming. What do I mean by that? Well, entrepreneurs tell me stories of their lives. And this is what I hear. They find themselves fueling up their cars, asking how their business can be better than their competitors. They are falling out of bed at 3am thinking about how their plan is going to be revolutionary. As they are spilling coffee on the kitchen counter, they are questioning whether they have the smarts to pull off a venture like this. By the time their heads hit the pillow, they are reciting, “I am going to fail and fail hard. The world will now see me for who I really am.”

Entrepreneurs are obsessed and that is part of the commitment. And if they were not, failure certainly would be an option. But success is possible if the work is done to make it happen.

Building a business is a thrilling, yet arduous task. It takes a significant amount of planning and collaborating with others to ensure that you have an idea that will work.

The research stage of building a start-up is the first and most critical piece of the plan. And understand, your investors are going to ensure that you took this step and included it in your business plan. Investors are not going to provide funding for an idea that isn’t balanced and well thought out.

Here are the three important reasons why, as an entrepreneur, you need to analyze your competition before you even put pen to paper.

Know What You Know and Learn from What You Don’t.

As a new or seasoned entrepreneur, you are full of industry information that is specific to what you want to do with your business. And you do not want to miss the opportunity to learn from the successes and mistakes of your competitors. By really understanding your competitor’s business and operation models, you may be able to avoid pitfalls that will hinder your progress, especially financially.

Don’t get stuck in the mindset that other business owners and CEOs have the magic wand. Remember, you don’t need to follow because you have the intrinsic passion and power to lead.

The Difference is in the Details.

By uncovering what other players in your space are doing, you are now able to determine your points of differentiation. What are others doing? Are they solving a problem? How are they succeeding and why?

This is much more than just having knowledge about market share. You need to build a competitive analysis that is thorough and should include: knowledge of their leadership team and their expertise, understanding their place in the industry, who is investing in their company, their industry partners, how have they built their brand platform and communication strategy, do they have a true difference or are they just following others, and are they recruiting and retaining the talent to help the business grow. These questions must be asked, and the answers must be documented if you’re going to successfully compete in the long term.

The Brand Builds the Reason Why, Especially for Investors.

Many have said, “build your brand and they will come.” Well, that is not true if the brand isn’t built with purpose and isn’t meaningful. Take what you learned from the competitive analysis and apply that as you build your brand platform. Unless you create the difference, and communicate it well, no one will understand where you fit in a fiercely competitive landscape. The brand platform serves many purposes as it aligns the business strategy to the corporate vision. The vision statement drives the branding, and it builds thought leadership. And remember, great brands will attract investors.

Consumers are coming to you for a solution, and they need to understand your value proposition to make a choice. They need the reasons why they should decide why your product or service solves their challenges and meets their needs.

Take the time to understand your competitors and you will find that you can develop a business model that disrupts or revolutionizes an entire industry.