Even if you are the first person to come up with an idea, even if you are the first person to market a particular kind of product, these are not guarantees that you will be the one who ultimately capitalizes on the opportunity you discovered. You may merely be showing the way for someone else who is better positioned; you may end up on the sidelines while others reap the rewards of the market that you created.
How can you think through this situation early in the life of your venture? How can you satisfy yourself that you will be able to get at least your fair share of the rewards? These questions can help analyze this dimension of your venture.
- Current solution: Does the potential customer already have solutions to the need/problem you identify? What are they? What are their shortcomings? Does the customer perceive these shortcomings?
- Direct competitors: Will there be direct competitors to your solution? What are they and what are their strengths and weaknesses?
- Alternatives: Are there other possible approaches to solving the need/problem? What are they and what are their strengths and weaknesses?
- Competitive advantage: What is your hypothesis of the competitive advantage of your solution? What is the value associated with that advantage?
- Uniqueness and protection: Is your advantage unique? Can it be protected? If so, how?
- Likely responses: Who are the most likely competitors? What will their likely response be and how strong will it be? What alternatives are likely to arise and how strong will they be?