What's New: Finding and analyzing your competitors

(from the latest issue of the Indie Hackers newsletter)

How do you find existing competitors before building?

• It can be intimidating to invest time and energy into an idea, then discover that direct competitors exist. Founders weigh in on best practices for finding and analyzing competitors!
• Start with the bottom of the funnel. Distribution > content. Below, we dive into these and other top business principles for startups.
• Founder Waqar Azeem hit $120,000+ in total revenue just 3 weeks after launching Usermaven, his privacy-friendly analytics tool. Here's how he harnessed the power of lifetime deals to exceed his financial goal, and how he used Facebook Groups to drive traffic.

Want to share something with over 100,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing

🔎 Conducting Competitor Analysis

by Francesco

I've launched a couple of small apps over the past few months, but I'm finding it difficult to map out all the competitors before starting a project. For my last project, I didn't find a competitor until I was checking the availability of a domain.

How can you find as many existing competitors as possible before starting a project? Also, how do you determine when you shouldn't build due to too many competing tools?

Scoping the competition

Davide Muzzarelli says that he conducts competitor research as soon as he has an idea:

If you're struggling to find competitors, you can hire a SEO expert on Fiverr for a quick search, or use a tool like Google Keyword Search. It's free, and you can find it on Google Ads.

Here's the competitor information that I look for:

• Distance from my idea.
• Distinctive features.
• Number of employees.
• Number of customers.
• MRR and ARR. You can check ZoomInfo, CrunchBase, or the founder's social profiles to find this information.
• Capital invested, if any.
• Customer targets.
• Marketing strategy.
• Website quality.
• Product quality, pros and cons.

If I find an established competitor with my exact idea and good execution, I will give up my original idea. Eventually, I will search for a different niche with a simpler product, or an extension or plugin idea to attach to the competitor's product. In this case, it's better to partner.

If I find no competitors (which is very rare), I search for more indirect competitors that solve the same problem. If the problem is already solved, I give up the idea, or niche it down.

If there are enough competitors, preferably with investments or relevant ARR, it means that the idea is worth it. In that case, it's better to start the business as soon as possible.

Differentiation nation

Richard Gao says that it depends on a wide variety of factors:

It depends on the size of the competitor, the level of similarity, and the size and nature of the market.

With similarity, I find that large competitors tend to offer solutions that are more general, so they don't focus their resources on one or two specific solutions. This gives indie hackers' products an opportunity to shine.

Regarding size and nature of the market, they say it's better to be a big fish in a small pond than a small fish in a big pond. However, although true, I think it's a little misleading. It's worse in every way to be a small fish in a small pond.

If the market is larger, there will be room for many competitors, and more gaps for you to fill. So, even if your competitors are doing something relatively similar to you, it might not matter too much.

It all comes down to differentiation. If the market has little differentiation, it will be much harder to separate yourself from a competitor.

To give my own personal example, I'm developing an AI web API for developers to allow them to implement AI into their projects more easily. I plan on hosting Stable Diffusion and Bloom (GPT-3 alternative) first. These two already have pretty tough competition, so how did I differentiate? I noticed that OpenAI and Stability AI are both very finicky about NSFW generations, and have very high costs. Bingo!

Although analyzing competitors can be annoying, take some time to explore their products to identify limitations. Finding those can be a pleasant surprise.

If you're curious about my product, you can follow along for updates here!

Validation for all

Chris says it's great news if there are larger competitors in the market:

It's the validation that you need for your idea. There is an existing market!

Of course, it's a bit of a double-edged sword because, in order to succeed, you need to be able to capture the attention of your potential customers. That's difficult to do when you have major competitors that already have brand awareness.

Lots of startups try to use the freemium model to overcome this problem, but it's very difficult to use that model effectively. I wrote more on that here!

Adam agrees:

The product that I'm working on has a competitor with a very similar concept, but using a different approach. They have received investment recently. For me, this is actually validation of the general idea that I had, and finding this out encouraged me to work on it even harder.

After finding competitors, I take notes to see how they tackled certain problems and features, and how things can be done better. Then, I implement those learnings into my own concept.

How do you conduct competitor analysis? Share your experience below!

Discuss this story.

📰 In the News

from the Growth Trends newsletter by Darko

😈 ChatGPT is being used to create malicious emails and code.

🛍 Best Instagram Live practices for e-commerce businesses.

🧠 How to increase customer perceived value: The psychology behind it all.

📉 Digital ad spending declined in November.

📚 2022's best books for founders.

Check out Growth Trends for more curated news items focused on user acquisition and new product ideas.

🧑‍🏫 10 Business Principles for Founders

by Dan Kulkov

These 10 business principles generated $32K in six months for MakerBox. I'm sharing these lessons in hopes that they help other founders!

1. Done is better than perfect

Our landing pages are not masterpieces.

We could spend months running interviews and changing copy, but why delay the revenue?

Ship early. Get feedback. Iterate.

2. Distribution > content

Our blog articles are okay. Some of them are even good.

But what's important is how many people are reading them. That's why we spend more time distributing content than creating it.

3. Trends come and go

We didn't tweet about Twitter Free University. We didn't launch a paid Slack community. We didn't build an AI tool to create profile pictures.

We stuck to our plan, even though it wasn't trendy.

Don't fall prey to shiny object syndrome!

4. Start with the bottom of the funnel

Getting tons of users is useless if you can't convert them to customers. Website visitors don't pay the bills.

That's why we focus on the activation and revenue steps of the marketing funnel.

Conversion is our holy grail.

5. Let people judge for themselves

We don't call ourselves "the best" or "the most popular."

Instead, we show part of the product for free, and spotlight social proof from our customers.

Transparency sells.

6. Educated users buy more

Getting 1K likes on listicles with free startup tools is cool, but you know what's cooler?

Creating content that boosts your authority and makes users smarter for free.

Whether it's newsletters, blog articles, threads, etc., educate your users. Don't forget to insert a CTA.

7. Go beyond video courses

Sorry, but people have more exciting things to do than watch you speak for 10 hours.

There are cheatsheets, templates, databases, challenges, productized services, and frameworks.

Try them before recording another video course.

8. Accept failures

Many founders have a hard time learning from failure.

Here is the truth: You will probably fail. But you can always get something out of it.

9. Start with problem-solving

It's so enticing to start working on new ideas right away, but don't set yourself up for failure due to poor execution.

That's why we spend time problem-solving new ideas.

Answering tough questions minimizes the risk of dumb mistakes.

10. Be patient

Audience building takes time. SEO takes time. Word-of-mouth takes time.

The good part? Being consistent pays off.

Do you have any cardinal business principles to share? Let's chat below!

Discuss this story.

🚀 The Spector Report

by Josh Spector

I'm sharing growth tips for creative founders! Here's this week's:

Social media is a tool, not a goal.

Your goal isn’t to get more followers, engagement, or views.

Followers, engagement, and views only matter if they help you accomplish an actual goal.

They should lead to an action, a sale, or a meaningful result.

Subscribe to Josh's For The Interested newsletter or I Want To Know podcast for more.

💰 Waqar Azeem Hit $120K+ in Three Weeks

by Waqar Azeem

Hi, founders! I'm Waqar Azeem, founder of Usermaven, a privacy-friendly analytics tool. We hit $120K+ in total revenue just three weeks after our public launch, and we did this without investment capital or paid ads.

Here's how!

The idea

We (my two cofounders and I) began working on Usermaven 18 months ago, after becoming frustrated with the difficulty of setting up analytics for our other SaaS products, ContentStudio and Replug.

All of the existing tools we tried were overly complex, hard to use, and turned out to be a huge time-sink for our team. That's why we decided to build a simple solution to this problem.

Beta users, validation, and pre-launch

We set up a landing page offering early beta access. We kept it super simple here, with a heading, subheading, one field, and a few images:

Once the users filled out the form, they were taken to a Typeform survey where we collected more information about:

• Their business.
• Their current role.
• The biggest problem they were facing with analytics.
• The type of solution that they were looking for.
• The products that they were currently using, or had used in the past.

The last step of the survey was connected to a Calendly booking page, where we offered an early peek of the platform via demo call.

We received 96 survey submissions, and were able to book more than 30 demo calls with founders, product managers, and marketing teams.

Here's how we drove traffic to our landing page:

1\. Personal networks: I reached out to my audience on various social media platforms, DMing people who fit the ideal customer profile.

2\. Facebook Groups: I posted in various SaaS Facebook Groups, including SaaS Growth Hacks (30K+ members), SaaS Founders (13K+ members), SaaS Products and Marketing (23K+ members), and SaaS Warrior (6.3K members).

Here's my actual post:

The idea behind this post was to provide assistance with setting up analytics for as many people as possible, as we recognized that the process can be challenging for many individuals. This was the best acquisition channel for us by far!

3\. Producthunt Ship: This platform allows you to list upcoming products, and it has free and paid plans. We opted for the paid plan at $79 per month for one month, and got 61 beta subscribers. However, the quality of subscribers was unsatisfactory for us because they weren't necessarily our target audience.

4\. BetaList: We opted for the $299 one-time paid listing plan, because we wanted to skip the waiting period and also be featured in the newsletter.

However, the results were not convincing. We only received nine beta signups from BetaList.

5\. Indie Hackers: We shared our progress and key milestones on our Indie Hackers profile.

The key to success on Indie Hackers is to be consistent, and share whatever knowledge or learnings you come across during your journey.

6\. Slack communities: We also tried to get the word out in some of the Slack communities related to SaaS and product-led growth. This worked really well because we were able to make personal connections by participating in the discussions, then request permission from the admins to create a post inviting beta users to our website.

A great list of Slack communities, categorized by niche, can be found here.

The lifetime deal

After doing everything mentioned above, Usermaven started getting some traffic, but the numbers were still low. The traffic spiked on days where we did something extra, like posting in social media groups or sending a newsletter.

Many founders believe that lifetime deals (LTDs) are a bad idea, but they can be the right option for some businesses. We decided to offer one quick LTD before starting the MRR journey.

The goal was to generate enough revenue to stabilize the company for a year or more, pace up the development, and spend on marketing.

However, we only wanted a small number of lifetime customers who could provide useful feedback, become enthusiastic advocates, and help us with word-of-mouth marketing, without overwhelming our ability to support them over the long-term.

We chose to run the LTD on our own without using a third-party platform. Why?

1. We didn't want to have to share 30%-70% of our revenue with a third-party platform.
2. We could manage lifetime pricing plans and limits according to the goal we had in mind. Our highest plan was $999, and it brought us the most revenue.
3. We got the payment directly to our bank account, and didn't have to wait 30-60 days for the funds to be released.

Here's how we ran the campaign: We set up a landing page that included clear CTAs, a demo video, a countdown to when the deal would end, testimonials (these came from the beta users), an "About Us" section, and FAQs. We also mentioned the pricing plans at least twice on the page.

Here's what our landing page looked like:

We informed our beta subscribers, and sent them a sequence of emails about this campaign. We also contacted the admins of certain Facebook Groups and gave some of them special lifetime accounts to promote us in their groups so that we didn't have to share any revenue. There are lots of amazing admins running these groups, and you'll be surprised at how helpful they can be. For us, the biggest revenue-driving Facebook Groups were Martech Wise, SaaS Warrior, Ken Moo SaaS Lifetime Deals, and Lifetimo.

We also sent an email to our existing list of subscribers from our other products. People hate cross-promotion, so we kept it to the bare minimum (three emails in total) to get the word out without annoying them.

Finally, we took to Twitter and posted about our deal in relevant threads. We were able to reach our goal of $100K+ with the above channels, so we didn't explore any others.

Here are some tips for running a successful LTD:

• Prepare a list of potential FAQs internally before launching the campaign, and keep adding more as it progresses.
• Create comparisons to other similar tools in the industry, because you'll get a lot of "How does it compare with X?"
• Be proactive with support, and help users as much as you can.
• Make sure that onboarding is smooth to avoid placing an extra burden on support. We worked on this a lot.
• Install an analytics tool from the start to track user behavior and analyze patterns.
• Tweak your pricing plans based on the feedback, but make sure that the benefit vs. cost makes sense. The LTD community brings a lot of well-coordinated pressure; don't fall for it.

The numbers

Ultimately, we made $120,261 from 373 customers.

We offered a 30 day refund guarantee, and had a ~5.7% refund rate, which is well below the average for LTD campaigns.

Our net revenue from the LTD was $113,414. Overall, it was an amazing experience, and we're super happy to have done it! Because of the overwhelming amount of helpful comments and support we received, we now have a wealth of resources, ideas, and use cases to bring to market in the near future.

If you are still in the early stages of your company's development and are struggling with getting new users, I strongly encourage you to try an LTD!

Discuss this story.

🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

🏁 Enjoy This Newsletter?

Forward it to a friend, and let them know they can subscribe here.

Also, you can submit a section for us to include in a future newsletter.

Special thanks to Jay Avery for editing this issue, to Gabriella Federico for the illustrations, and to Francesco, Darko, Dan Kulkov, Josh Spector, and Waqar Azeem for contributing posts. —Channing