by Deren Baker, CEO of Jumpshot
Whether you’re starting a new business or launching a new product or service, it’s important to realize that no company functions in isolation. Each company in an industry is interconnected, much like the organisms in one of the many ecosystems on our planet.
Other companies working in that same space affect a company’s actions, customers, and products. Doing a full census of the industry is an excellent way to understand how the ecosystem functions. Understanding the data about the entire ecosystem is the key to making informed business decisions.
What to Study in the Industry Ecosystem.
When working on a business plan, you need to look at a few different aspects of an industry to grasp how it functions. Some of the most important areas to examine are your own company, your competitors, and the industry’s clients and experts.
Your Company.
I recommend you start with a SWOT analysis — strengths, weaknesses, opportunities, and threats. You analyze your company and compare your findings to your competition. Without a SWOT, you can’t have a clear direction or understanding of what you’re getting into. The key to a successful SWOT is objectivity. Examining your company objectively will let you know if and when you need to adapt your strategy.
Through your analysis, you can find a lot of information that you wouldn’t necessarily consider when building your business. You’ll identify your true strengths and holes in the industry that need to be filled. A SWOT analysis can confirm or disprove that there is a need for the product or service you’re bringing to the market.
Your Competitors.
If you’re new to the industry, no one is going to beat down your door to pay for your services or products. Understanding the industry layout and the leaders in your space is crucial — you need to know how they became successful in the first place. Study their strengths and weaknesses, as well as who their customers are (and what it will take to win them over).
You can bring in new business by showing how your company excels in an area where your competition may not. For example, Jumpshot dove into the crowded marketing analytics space, which was filled with established companies in addition to startups. After we examined their strengths and weaknesses, we were able to unlock a few key areas where our data is significantly stronger, including the size of our mobile data and the robust amount of transactions.
Studying the competitive landscape means you’ll be able to better understand your unique capabilities and competitive advantages. It answers the question, where does my company fit? This is important both for sales pitches and for tactical decisions regarding your business model and offerings.
Clients and Experts.
Get an understanding of the frustrations, successes, needs, goals, and expectations of anyone and everyone in the industry. Pitch your idea over and over, and refine it based on the valuable feedback you collect. It’s far easier to build and sell what someone tells you they need than to convince people they need what you’ve built. Feedback from experts can also help advance your starting point by letting you build on their experiences.
When you collect customer feedback, you can be sure you’re creating something people actually need. At Jumpshot, we discovered that our customers preferred simple data delivery with direct insights rather than using a self-serve platform. Based on that, we created numerous data delivery options to provide customers with data in a format that they could best digest internally.
5 Steps to Take Based on Your Census.
Once you’ve collected data and analyzed your competitive landscape, you’ll understand what your industry is really like and where your company best fits within its ecosystem. Here are five steps to turn that census information into informed business decisions:
1. Convert weaknesses or threats into strengths and opportunities.
Based on your SWOT analysis, venture into areas of the market where you have an advantage over the competition. If the threats and weaknesses that you’ve identified can’t be converted, minimize or avoid them. The music streaming industry is a good example. Pandora focuses primarily on the U.S., while SoundCloud targets Millennials around the world. By opening its service to global users instead of focusing on the highly competitive U.S. market, SoundCloud was able to gain momentum and vastly expand its user base.
2. Engage with professionals in your field.
Immerse yourself in the market by joining specific professional groups and forums to keep up with current players, trends, and challenges. At the same time, you can position yourself as an industry leader, gaining attention for your brand and forging connections with others in your field.
3. Gain insights from industry leaders.
Subscribe to their newsletters and blogs, follow them on social media, and set up Google Alerts to keep up with their outreach and updates. Learn from leaders’ experiences, wins, and even their mishaps. You can learn just as much from a company’s failures as you can from its successes, and these mishaps are easier to find.
4. Learn from your competitors’ customers.
Use look-alike audience features on social media and paid search platforms, and base them on your direct competitor’s audience. Then, analyze the performance of your ads, messaging, and landing pages. Understand what resonates with those customers and drives them to action.
5. Procure competitive intelligence.
There’s valuable information that isn’t publicly accessible. Subscribe to research firms and use competitive analysis tools to get as much information about your competition as possible. That way, you know what to focus on and what products and services to develop.
Before you launch a new business, product, or service, it’s vital to understand your company, your industry, and your competitors. Collect data, analyze it, and let the data guide you. Your business decisions can only improve by taking a thorough look at the industry ecosystem.
Deren Baker is the CEO of Jumpshot, a San Francisco-based startup that offers marketing analytics solutions tailored for the travel, retail, media, financial, and e-commerce industries. He previously held senior roles at Travelocity and Switchfly.
