Note: This post was initially published on CitizenTekk where I am a guest contributor.
Would you ever drive your car without checking your rearview mirror at all? How many times have you seen a speed car racer coming from behind, driving faster and see the leader try to block them in a NASCAR race? Running a business against competition is no different. You would never take the seat of a racecar and not have rearview mirrors – it would be too easy for your competitors to pass you by.
Competitive Intelligence is your rearview mirror
In business, the only and true way to check your rearview mirror is to have competitive intelligence (CI). CI will give you the tools and metrics that will allow you to measure the competition. You will be able to see when someone is coming fast and also measure how you are catching up to the market leader (yes, CI can be both a rearview mirror as a radar for your business). Without comparable metrics for all the players out there, you are forced to rely on subjective analysis and opinions that can be completely misleading when it comes to sizing the performance of your competition. If you can see them coming, you will be better prepared to handle them and position yourself in a way that will prevent them to bypass you.
Rearview mirror is used more often than once a year
You would never just check you rearview mirror once a year – so why do you do this with CI? While we will work on analyzing competition for a yearly or quarterly meeting, we should never underestimate them —each of our competitors are doing things everyday to improve their business. They could be planning a new product release, expanding in a new market, hiring new people, approaching new market segments, etc. Competitors never stand still while you are busy working on your business. As much as you can be active, your competitors are doing pretty much the same. I am sure that the better racecar drivers check their mirrors all the time while staying focused on what’s ahead of them.
Look for early indicators
Waiting too long before recognizing a competitor in our rearview mirror can be quite damaging to your business. You should leverage CI to capture as many metrics available and to be alerted to anything that changes significantly. It could be change in traffic growth, social media activities, and sudden increase of job postings or new trademarks being filed. You need to put a system in place where it’s easy for you not only to capture as many of your competitor’s vital signs, but also to be able to frequently measure any changes. And you should be worried if many metrics are all moving at the same time – it’s hard to block someone with momentum, and the sooner you can see it coming, the better you can adjust your own business.
Only the paranoid survive
We have seen too many companies in the lead suddenly becoming laggards or even going bankrupt: Silicon Graphics, Palm, MySpace and Blackberry are a few names that come to mind. It’s fine to be proud of being the market leader, but you should never assume that no one is gunning for your throne. Leading companies should be the ones that worry the most about their market position and need to be even more vigilant when it comes to competition. This also applies to any of the cars in the race as there are new entrants coming in all the time – the bigger the opportunity, the more people are trying to get a share of it.
Note: This post was initially published on CitizenTekk where I am a guest contributor.
For many years, competitive intelligence has been used by large organizations capable of paying expensive specialist that would mine various sets of data in order to find that elusive piece of information that would help the Fortune 1000 beat their competitors. What used to be a luxury for the most fortunate companies is now something that is at the reach of any company – even the smallest ones.
There is a proliferation of information out there that is just begging to be mined by any individuals who wants to be better informed. There is no shortage of data you can find on your competitors and even your own business — from news feeds, to freely accessible company databases, web and social media metrics, to SEO and Pay per click (PPC) analytics all the way to publicly available information about employees, job posting, trademarks and patents.
No matter how big your company is, you are constantly required to have a good understanding of the competitive landscape — from direct competitors, to indirect competitors to keeping a close look at potential new entrants in the market. The more you know about your competition, the better you are positioned to identify and define a competitive advantage for your business. Competitive intelligence can be valuable for many roles in your company:
As the CEO, business partner or owner, competitive intelligence is a must if you don’t want anyone else to eat your lunch. We often talk about having a vision of the future, but this is not possible if you cannot foresee what your competitors will do. Competitive intelligence gives business owners a better method to react faster to changing market conditions and prevents you from being caught off guard if one of your investors starts asking hard questions about stuff they learned about your competitors.
We often say that the Product Manager is the CEO of the product. Not only do you need to make sure that your product or service is meeting the customers needs but you also need to know what your competitors are doing – such as what direction they are taking with their own solutions. As your competitors release new products, you need to make sure that your own roadmap takes into consideration any change in user demand that can be caused by actions taken by other companies. You cannot afford not to be the first one who learns about anything changing in your competitive landscape.
Your entire sales organization relies on you to deliver the right message to the market and bring enough leads for them to achieve or surpass their sales targets. You need to make sure that your message is superior to that of your competitors’. You always have to be one step ahead of them. Nobody wants to play catch-up or start losing market shares. You also need to provide competitors reports to your sales team and always have a good answer for any competition related questions your customers might have.
Sales & Business Development Managers
There is nothing worse than being in a meeting while unaware of the latest news or changes that have impacted your key customer or partner. One of the biggest challenges in sales or business development is to build trust with your key contacts. Unless you are constantly aware of what’s going on, you are at risk of missing key information that will help you close or secure that important partnership your company needs to get.
Once someone is convinced of the value of continually doing competitive intelligence, the biggest challenge is to find the right content sources and finding the time to do it. In addition, you need to make sure you can do this cost effectively in regards to your company. Luckily, there are many new companies out there that are looking to do just that: to provide an affordable solution that will allow any business professional to capture competitive data and keep it up to date for you – removing a lot of the pain related to doing competitive intelligence.
It had been interesting to see the market reaction since Nest announced their second product: Protect. Who would had thought a few months ago that people would get excited about a smoke detector. Before the Nest Protect, I don’t think anyone ever had a conversation about this stupid device. So why are we getting so excited? It detects fires, smokes and alarms you. Basically these are the same features that any other smoke detector offers. I think the key to success of Nest is not the “what” but focusing on the “how”.
How are you interacting with your smoke detector is the one thing that is ultimately different. If you leave engineers just develop a product on what it needs to do, you would end up with just another smoke detector. But if you get your product team to think about how the device will function and behave, then you are on to something.
Thinking out of the box is needed here. No crazy idea is crazy enough to put on the white board and find an innovative approach to any product solution. For example, a lot of companies are going to the cloud with their solution but if it’s just a carbon copy of a product that you would have on a desktop, then you are not fully taking advantage on how the latest technology can help you make a different product.
Of course, this is not an easy process and many times you still need to cover the bases when building the foundation of your platform – but seeing how Nest is changing all these dumb devices around our house, it is quite inspiring to do the same with your own products you are managing … I know I will be revisiting what I am doing with Strategic Planner to take the product to the next level …
So what are you going to do today to innovate like Nest did?
As part of my daily routine, I always spend a bit of time searching the web for interesting content that will improve my understanding around competitive intelligence. I am always fascinated by the sheer amount of it that designed and presented in a very complicated way. Being pretty much a no-nonscence and pragmatic guy, I see myself wondering why this is the case. Why is it that many of the expert in competitive intelligence (CI) make it sound complex – like they do not want everyone to be able to do their own CI.
Case of deja vu
A friend of mine recently reminded my that the situation is very similar to my first startup, Kaydara. One of our goals was to simplify the tools to capture (a.k.a. motion capture) and animate 3D characters. After a while, we had realized that many of the users that would be our biggest supporters ended up to be our most challenging blockers to success. We had determined that democratizing motion capture and simplifying the process of character animation was much needed by a large audience but not the expect in the field. With CI, I am seeing the same situation.
Democratizing Competitive Intelligence
So my personal goal right now is to find a way to truly democratize competitive intelligence; to give the tools and the means for any company to know more about their competitive landscape – building a simple interface that makes the information easily accessible. This so called “long tail” is actually a very large market opportunity. Finding companies that have a true handle on what their competitors are doing is pretty much like finding a needle in a hay stack.
Is this a threat to the CI experts?
At first, I am expecting some resistance from many of the so called CI experts – but like any democratization effort, there is always room for the specialists to thrive in a much expanded market space. Their offering might evolve to something more compelling but at the end, there will still be enough companies that are willing to pay top dollars for the elusive piece of information out there.
Where to start?
For the past 5 months, I have been meeting with as many companies as possible, getting valuable feedback on what people need to be smarter about their market and their competitors. If you would like to take part in my effort to democratize competitive intelligence, I invite you to email me at info at strategicplanner.com and I would love to talk to you and see how my development initiative could address your needs … for those that want to directly experiment what I am working on can just sign-up to our free beta program.
So what do you need when it comes to competitive intelligence?
I really don’t get people that put the word Founder in their title or business card. It’s more than fine to put that fact on your resume but being a founder is not a function. Being a founder is like saying “I bought a house”, it does not say what you are doing in the company. Call this one of my pet peeves in business … and every time I see a founder title, I always start to wonder why is it so important for that person to be recognized as a founder? Does this person deeply needs to have people know this fact?
I am the father of 4 kids and I am the one that got my wife pregnant
Sounds pretty weird, right? Well to me saying that you are a founder sounds just as weird. In a business relationship, focus on what you are working on and what you are responsible for – this is what your title should say …
This was my rant for this Friday .. what do you think?
I have heard too many time lately that the business plan is dead – that it’s not used anymore. While I would agree that spending a huge amount of time drafting a lengthy Word document is definitively outdated – but I believe it’s more the death of the format itself than the value of what’s in a business plan.
So what’s in a business plan?
Let’s take a few minutes and look at what you will usually find in a business plan:
- Target Markets / Market Sizing
- Definition of Products and Services
- Revenue Model
- Marketing Strategy
- Sales Forecast
So the question is the following: who does not need to know, understand and master every element of this short list? Most likely only companies that do not succeed and fail to raise money fit in the category “don’t need this stuff” … Seriously, I talk to a lot of entrepreneurs out there and I often ask questions about those specific items. Not having a good answer on any items is definitively a red flag. And no, saying “Gartner says it’s a billion dollar market” or “We don’t really have competitors” does not really cut it. Having an answer does not mean that it’s credible or people will believe you. You need to provide some depth and analysis for each component.
What’s wrong with a static business plan
Every day, there are events or things happening that are changing your business. You make product decisions, you are seeing new trends in your customer base, you are seeing new business opportunities, etc. Your competitors do very much the same – which means that everything around the “business plan” change on a regular level. Entrepreneurs need to stop thinking about the business plan as a deliverable but rather as a collection of topics that the company needs to fully understand and master. You need to update your thinking about any elements as things change both internally, actions your competitors are doing and data points you are getting from customers and the market.
Keep your “plan” alive
One of my tricks is to keep a few documents (couple of spreadsheets and a Keynote presentation) up to date all the time. Each time, I see or capture data that has an impact on any element of my business plan, I take a little bit of time to update my documents. A little bit every day prevents spending a lot of time when needed – specially when you are getting interest from an investor or key partner for example. This means that my company presentation changes virtually everyday. Each presentation or pitch that I do is somewhat unique. It has to be – there is not really other way around it.
The benefit of keeping things alive
Keeping yourself current and having a plan up to date allows you to provide a fresh view of your business at every meeting or networking event. It allows you to refer to recent events or changes in your market and provides you an ability to demonstrate that you are on top of things – never caught off guard. It also allows you to keep yourself and your team a lot more alert on my change in your market or competitive landscape – don’t allow yourself to react late to any critical information. Think of a 100m sprint at a time – rarely (if ever) you will see the last out of the gate winning the sprint. Each day, each week is somewhat of a sprint. Gear yourself to be the front runner at every chance you get.