Unless you’ve found a problem that no one has ever tried to solve, it’s likely that you have some competitors. Your customers have found them too, and have started associating price, features, and more with them. You can study these products to look for commonalities and learning opportunities. This can help you understand the state of the market, as well as user expectations, and give you some ideas when ideating on your product.
A direct competitor is a product or service which provides a direct or similar solution to the user as your product. For example, a Honda Accord competes directly against a Toyota Camry. They target similar customers, offer similar features, and are priced similarly. It’s very easy to make a side by side comparison of these products and you will find that there are small differences between them. This makes it easy for consumers to form expectations about what they should get for the price they are paying.
So if you’re building the next best mid-size sedan, and all of the other mid-size sedans come with a rear view camera, yours probably should too. If it doesn’t, then you might need to charge less or offer enough value in other features that the customers won’t care. Pick and choose the areas where you want to be like your competition (less risky) and where you want to stand out and do something different (more risky). It is helpful to study direct competitors to learn more about specific product features and user expectations.
An indirect competitor is a product or service that provides an alternative solution to your product. For example, Uber, a bicycle, and a car are all indirect competitors. Uber offers a low upfront cost, fast, and convenient alternative to buying a car. However, this might get expensive over a long period of time. And a bicycle costs almost nothing when compared to those two, but is inconvenient and potentially dangerous. All of these offer solutions to one’s need for transportation, but with much larger differences between them. This makes it more difficult for consumers to draw direct comparisons between the products.
Studying indirect competitors can help you identify industry trends and understand user behavior at a higher level. If you see auto sales going down, and Uber usage going up, is there an opportunity to do the same thing for the bicycle?
If you’re inventing such a novel product that there are no direct competitors, and no indirect competitors (this is unlikely), there are still additional products you can research. You can look at products in other industries that solve other problems, but maybe use a similar method. This may provide you some insight into good user experience or technical knowledge on how it works. It gives you an opportunity to see what works well and what doesn’t for that market, before figuring out how to implement yours.
You can also look at the other things that your customers spend money on. I’d recommend this even if there are direct and indirect competitors, as it will give you more insight into the type of lifestyle they live and the things that they value. For example, if you’re designing a product for mechanics, and they purchase very rugged and high quality tools, it might be hard to market a disposable product to them. They may be inclined to value durable and premium products over cheap and disposable products.
When you study these comparative products, you can learn a lot about what consumers value at a high level such as quality, brand presence, and general appearance.
Now that you’ve learned how to research your users and competing products, you have some data that can be used to ideate on creative but grounded product concepts. It’s important to brainstorm on multiple ways of implementing your product because generally your first idea isn’t your best one. We’ll learn more about the concept ideation process in our next article.