Would you go spelunking without a headlamp? What about mountaineering without a map?
Well, pursuing your great app idea without performing a competitive analysis would be just as foolish.
Finding and analyzing your competitors will shine a light on the “roadmap” for your business. Without it, you miss out on the chance to fill actual needs in the market, as well as learn from the mistakes of similar businesses.
It’s surprising how many Los Angeles app startups come to us on a weekly basis asking for advice who haven’t taken the first basic steps towards this critical phase of app ideation.
In today’s post I’d like to walk you through the why, when, and how of running a competitive analysis for your app idea. You don’t even have to leave your desk — just grab a pen and paper and follow along.
Step one: what is a competitive analysis?
A competitive analysis is simply the practice of looking at and learning from mobile app developers with products similar to yours. It’s really that simple.
While there are several phases to the process and every mobile app developers will perform their competitive analysis slightly differently, the big picture is always the same: find your competition, locate a service you can provide better than them, and draft a plan for doing so.
Step two: why perform a competitive analysis?
The “why” of performing a competitive analysis really touches on a variety of areas in your startup.
First, it helps “crystallize” the motivation behind your product or service.
Second, it double-checks that your idea is viable before you invest more time and money in it.
Third, it lets you see what similar entrepreneurs are failing at. As any successful app developer will tell you, failure is always an opportunity.
Failure is an opportunity. But why fail yourself when you can learn just as much from the failures of others?
Step three: getting started
Enough chit chat. Let’s get started.
Here are the tools you’ll need:
- A spreadsheet
- pen and paper (or Evernote)
- A few hours of quiet, uninterrupted time
Phase 1: search
First thing’s first: open up Google and search keywords related to your app idea.
For example, if your goal is to create an app that collects recipes, you would search: “recipe app.” If your app idea is a social network for birdwatchers, you would search: “birdwatching social app,” “birding app,” or maybe even “Facebook for bird nerds.”
You don’t have to be an SEO scientist for this — just try to imagine what you’d search if you were a member of your target audience. It’s common sense.
Once you’ve tried Google, do the same thing in the app store. Searching social networks dedicated to startups like ProductHunt and Reddit’s r/Entrepreneur or r/startups section can also help turn up early-stage competitors that might not rank in “official” channels like Google and the Apple App Store. The earlier you know who you’re up against, the better.
Phase 2: catalogue
For each potential competitor you uncover, you’ll want to record the following information about their business:
Note their official domain, and run it through a visitor analysis engine like Ahrefs or Alexa to get a ballpark on how many visitors they get and how long they’ve been in business. (Both of these tools are excellent and offered free trials at the time of this writing.)
How many visitors or what “domain rank” translates to a “threat” depends on how big your target market is. A simple way to get a benchmark for what “success” looks like here is to plug a competitor you know is doing very well in and see what their visitor/score numbers are, then compare those to competitors you’re less familiar with.
2. Core value proposition
Chances are the “value proposition” unique to each of your competitors won’t be exactly the same as your app idea — just similar enough to steal users. Write a brief summary of each one as you search, to make sure you don’t get them confused later on.
3. App Store ratings
This is one of your most important metrics. Note this score for each competitor in your spreadsheet and we’ll return to it for the next step.
4. App Store reviews
Comb through the reviews and look for repetitive complaints (as well as competitive praise).
If every other review complains that it doesn’t update often enough, you just identified an easy win that matters for your future customers.
If every other review expresses thanks for a particular feature, you better be ready to really deliver on that feature’s equivalent in your app.
5. Social media
Social media accounts aren’t always a great indicator of how successful a company is. However, they’re a great thing to monitor for insight on how they engage users, how they handle support requests, and other factors you’ll need to compete on.
Not all startups monetize in the early years. If they have, though, take note of how they’re doing it. Are customers happy with the way they pay for service?
Could you gain traction by offering a radically different model, for example doing a cheap monthly subscription against a competitor with a high up-front cost?
Make note of if each competitor is currently monetized, and if so, how (freemium, premium, in-app purchases, etc). This is usually marked next to an app’s name in the app store.
Once you’ve gathered most of your competitors, make a quick note of what makes each one “special.” This key difference is something that matters to users in that market.
Your app idea will need a clear, useful differentiation if you’re going to succeed. Better to chase a unique differentiation than accidentally use one that already exists.
8. Strengths & weaknesses
Based on everything above, mark the top strengths and weaknesses you see for each potential competitor.
Phase 3: finding your foothold
At this point you have a pretty strong idea of what the current market looks like for apps in your niche industry. Now comes the fun part: inserting yourself into the picture.
What would an app look like that solved the most common failures and weaknesses of the existing apps, and what would it’s unique differentiation be from everything already established?
Ideally, your app idea will fit into this notch. If it doesn’t, don’t be afraid to go back to the drawing board a tweak it so it better matches the “killer app” users have been asking for.
The purpose of a competitive analysis isn’t to pat yourself on the back for having a great app idea. Instead, it’s the perfect time to pivot and tweak the concept to increase your odds.
Final step: long-term monitoring
At this point you might think it’s time to just forget about the market and concentrate on your product. Unfortunately, it’s not that easy.
Your competitors will be constantly evolving, while you develop your mobile app as well as after you launch. Keeping up with the pack will require constant monitoring.
You need to beat them to the punch on updates, extra features, customer service, and a million other factors that you’ll never know about if you don’t keep tabs on them.
Here are some tools that can help you keep an eye on them:
- Google Alerts: enter keywords related to your app idea to get updates if new competitors launch online.
- Ahrefs: particularly for apps with web-app versions, a backlink-aware tool like Ahrefs is critical for spying on marketing tactics and growth.
- BuzzSumo: this is a great services for getting updated on developments within your niche app industry.
- Social media: follow your enemies, even if it’s painful to watch them score wins.
The big picture: an ounce of preparation
Performing an analysis like this sounds dry, but app developers who are truly passionate about their app idea will actually find it inspiring to crystallize the picture of what success will look like for their company.
Thought exercises like this are the bedrock of successful apps — if app development is like mountain climbing, competitive analysis is as essential as where you place your feet.
Getting a foothold in a competitive market means careful consideration of where to put your feet.Tags: Android, android app developer, app development, app idea, app marketing, app store, apple watch, business analyst, competitive analysis, connected devices, google play, hacking, iOS, iPhone app developer, mobile app development, mobile apps, mobile commerce, monetization, social media, social network, startup, startup strategy, startups, technology, ui design, ux design, venture capital