What Founders Get Wrong About Analyzing Competitors (And How to Fix It)

Understanding your customers is important — but it’s not enough.

There’s something (… or someone) else you need to understand if you want to win.

Yeah, I know, the title spoiled the surprise. I’m talking about analyzing competitors.

Look, you’re not operating in a vacuum.

Other businesses are trying to win the same people you’re targeting, with similar products, similar pricing, and maybe a bigger budget.

And for the love of everything, don’t just google your competitors and call it a day. Different types of competition influence your positioning, pricing, and strategy — and if you ignore them, you’re likely to make bad calls.

In this article, we’ll walk through what competitor analysis actually involves, how to approach it strategically, and the four types of competitors you need to identify and track if you want to stay competitive.

The 4 Competitor Types You Must Recognize

You’re not building your business in a vacuum. You’re building it next to dozens (if not hundreds) of others, all targeting the same audience — with different strategies, strengths, and weaknesses.

Understanding where you stand among these players can instantly reveal what makes you unique… or dangerously replaceable.

Here are the 4 types of competitors to look for:

1. Market Leader

They dominate the space. They’re known, trusted, and loud. They often set the tone for pricing, marketing, and expectations.

Think:

What do they offer that everyone expects by default?

This question is EXTREMELY important.

Market leaders shape expectations and if you don’t meet those expectations, you might feel “innovative” — but your customer just sees “incomplete.”

I’m telling you, by asking yourself the right questions, you can get a competitive advantage over literally everyone.

Real world example in 3… 2… 1…

If you’re building a project management tool, the market leader (e.g., Asana, Trello) has trained users to expect boards, tagging, and integrations. If your tool skips those “table stakes” features, people won’t think you’re disruptive — they’ll think you’re broken.

2. Market Challenger

They’re bold, scrappy, and unpredictable. Challengers are usually second- or third-tier players who aggressively try to out-market or out-innovate the leader. They tend to be younger companies with sharper angles and riskier messaging.

Question: 

Are they doing something bold that’s clearly working?

This question forces you to look at momentum. 

Market challengers often introduce new pricing models, features, or tones of voice that the leader won’t dare touch…yet.

In the banking space, Revolut and N26 challenged legacy banks not by offering better loans — but by making design and onboarding frictionless. 

They just made it stupidly simple.

That gave them traction among younger audiences who didn’t want to “talk to a bank.”

3. Market Follower

Stable, consistent, and often invisible to founders until it’s too late. They copy the leaders quietly and profit without taking much risk.

Ask yourself:

Are there businesses doing the same thing as you… just slightly more polished?

You might not be special.

I know, it’s painful.

Many founders build offers that sound good — but are already being executed better by someone else with cleaner messaging and tighter delivery.

Let’s say you offer LinkedIn ghostwriting. You’re competing against market follower agencies who already have a three-step onboarding process, a client dashboard, and testimonials from 30+ founders in your exact niche.

Either step up your game to out-do the market followers, or innovate and position yourself differently.

4. Market Nicher

These are the focused assassins of the market. They don’t try to be the biggest — they aim to be the only. They serve small, overlooked segments extremely well and tend to build fanatically loyal audiences.

Ponder:

Are they laser-focused on one customer, problem, or delivery format?

You may think a niche player “isn’t a threat” due to their size. 

A wise man once said… size isn’t everything.

If your dream customer stumbles upon them — and feels seen — they’ll choose them over your generalist offer every time.

Just think of ConverKit (now rebranded to Kit).

They literally ONLY focus on creators. That’s how they market themselves. 

So… do creators pick Mailchimp? 

No. They don’t.

You can have something those types of founders don’t…

And that is – my Startup Launch Roadmap!

It’s a step-by-step guide designed to show you how to raise investments, build a product or service, launch it, and keep scaling as long as you want to.

If you’re an entrepreneur in ANY industry… you’ll find it really useful (plus it’s free!):

Where do YOU fit on this spectrum?

Once you identify your competitors, it’s time to look within:

• Are you trying to lead the market with authority, credibility, and scale?

• Do you want to disrupt the status quo by being faster, cheaper, or more radical?

• Is your real play to quietly build a niche empire — one hyper-loyal micro-segment at a time?

• Or… are you unintentionally following the crowd and blending in?

Positioning determines everything.

How you price: Leaders can charge premium. Disruptors can undercut. Nichers can charge more because they’re specific.

How you talk: Leaders speak with authority. Challengers speak with urgency. Nichers speak with intimacy and empathy. Followers… well, they usually sound like everyone else.

What features you offer: A challenger adds a bold new feature to stand out. A leader refines the core expectations. A nicher cuts everything except what one specific customer deeply needs.

Who you attract: Your positioning signals who your product is for – and more importantly, who it’s NOT for. As a rule of thumb, vagueness repels, while specificity attracts.

A Simple Step-by-Step Process For Analyzing Competitors

Don’t just Google “top 10 [industry] companies” and pat yourself on the back.

Actually, always pat yourself on the back. Root for yourself. 

But, still don’t just Google top 10 [industry] companies!

That search will give you a rudimentary understanding of your competitors, but we want to go deeper. Much deeper.

Step 1: List Your 5 Closest Competitors

Not the biggest. Not the most famous. The closest to what you’re building or selling.

Ask:

• Who’s targeting the same customer?

• Who’s solving the same core problem?

• Who would my buyer compare me to side-by-side?

Where to look:

1. Google search using problem-based keywords (“how to onboard new SaaS users”)

2. Reddit, Facebook Groups, Indie Hackers, Slack communities…

3. Marketplaces like AppSumo, Product Hunt, Clutch, or Upwork…

4. Testimonials from your own leads (“I almost went with X instead…”)

Of course, this takes a lot of work, and you don’t have to do everything today. Bookmark this guide so you can perform this analysis as you go.

Step 2: Compare Their Offers

Now that you have names, strip away the branding and study the offer.

Ask:

How are they charging?

Are they charging hourly, flat fee, freemium? What does that imply?

What’s their promise?

What specific transformation are they selling? (e.g., “2x retention in 90 days” vs “better onboarding experience”)

What does their delivery format look like?

Is it done-for-you? Coaching? SaaS? Toolkit? Hybrid?

Pro tip: Pay attention to how they name their services or frameworks. These names are powerful, since they make the outcomes look more ‘tangible’.

Step 3: Evaluate Their Strengths & Weaknesses

You want to understand what delights and what disappoints their users.

Where to look:

• Public reviews (G2, Trustpilot, Google, App Store).

• Social proof and testimonials on their websites.

• Twitter/X replies, YouTube comments, Reddit threads.

• Your own leads — ask what they liked/didn’t like about alternatives.

Look for patterns:

“Great product, but the onboarding sucked.”

“Really helpful, but overpriced.”

“Loved the outcome, but communication was inconsistent.”

Now ask: Where can you outperform them, and where are you WILLING to outperform them?

Step 4: Label Them by Competitor Type

Use the 4 types:

1. Leader: Do they dominate the category?

2. Challenger: Are they growing fast with a bold angle?

3. Follower: Are they copying someone else (but well)?

4. Nicher: Are they obsessively focused on one audience?

The way you compete with a challenger is very different from how you out-position a nicher.

You don’t beat a market leader by mimicking their features. 

You beat them by being faster, more focused, or more emotionally aligned with an underserved customer.

You can always ridicule “the big businesses who treat you like just another number on a spreadsheet.”

Takeaways: Analyzing Competitors

Most founders don’t know the first thing about analyzing competitors – and it shows in their positioning, pricing, and product decisions. 

If you want to win in your market, you need to understand who else is in the game, what they’re doing right, and where they’re leaving gaps. 

Here’s how to do it:

• You’re not building in a vacuum. Other businesses are targeting the same customer, often with more resources.

• Don’t just Google a list of companies. You’re better than that.

• Market leaders define the default expectations in your category.

• If you don’t match what the leader offers, customers might see your product as broken, not innovative.

• Market challengers win by being bold, fast, and different.

• Study what’s actually working for them – pricing, design, delivery.

• Market followers quietly copy and improve. They’re often MORE polished than you.

• If someone is doing what you do (but smoother), you need to step up or shift.

• Market nichers serve small audiences extremely well and win loyalty.

• You might think they’re not a threat…until your dream customer picks them over you.

• Once you know the competition, choose your role: lead, disrupt, niche down, or reposition.

• Find 5 competitors solving the same problem for the same audience. Look for them in forums, communities, marketplaces, and even your own sales calls.

• Analyze their pricing, promises, formats, and how they name their offers.
  
• Read their reviews and testimonials. Look for patterns in what people love or hate.