A key aspect of any UX research is looking at the competitive landscape. No competitors? That’s highly unlikely and if there really aren’t, that’s a problem too. Some key thoughts from our years of UX research and competitive analysis and what to consider.
No Competition – First Mover
We’ve actually seen this happen twice. It’s not good. But it also can be, but that comes with a cost. When Uber launched, there wasn’t any real competition, outside the taxi and limousine services. This was similar to Airbnb. If there’s no competition, that means you’re the First Mover in the market. Great. Not so fast. As a First Mover, unless your solution is very easily explained and does not disrupt a whole industry, you’re going to have to a) educate the market and b) deal with legal issues. Uber and Airbnb ended up fighting a lot of legal battles as well as political, across multiple jurisdictions, for years and they still are.
They also had to educate their market on how their services were used and the value they delivered to the customer and those providing the service. They also had to figure out a lot of other issues along the way, such as when Airbnb hosts homes were wrecked by partiers and Uber drivers sexually assaulted passengers. First Mover status can be good, but it can also be very expensive.
If the UX research indicates your idea for the business is in First Mover territory, you’ll need to also figure out potential societal, political and legal implications. Before you try to go and raise any money, especially before bringing in outside investment.
This is an area we often find startups or businesses that are established and looking to enter a digital space through an app or new service/product offering, fail to look at. An indirect competitor is one that can, seemingly out of nowhere, come along and mess up your whole business model. Often, they are on the fringe of your industry or offering or maybe an existing business in the sector you’re looking to disrupt. But they have the resources to either eat your lunch, shut you down or buy you to shut you down (which may not be too bad depending on the price.)
While many UX researchers, mostly in-house, identify them, they often don’t look much beyond brand positioning, product features and revenues if available. Competitor matrices are kept simple with an emphasis on looking at the UX/CX, pricing, customer estimates and features. This is necessary, but only gives part of the story. A deeper dive is needed to understand how they may react to your solution and how they may counter it, especially if they’re farther along in the market. We saw this a lot years ago in the “to do” list space. Now it’s a mess and no major company like Microsoft, Google or Apple is going to buy a “to do” app.
There are other factors to consider in a competitive analysis, but these main ones often get little enough attention. They are critical considerations for both startups or a mature business looking to enter a space. You can spend a lot of time on features, user surveys, focus groups and beta testing, but you should also know your market, its direct and indirect competitors and understand if you’re a first, second or third mover in the sector you’re going to play in. Once you do, then you can consider strategy.