4 Stealth Ways to Spy on Competitors

NEW STARTUPS

Startups that you can invest in with as little as $100 right now:

🥤 SmartSoda - Kinda like a Coca Cola Remix machine (LINK)

🚁 Doroni Aerospace - Your car in the sky, reminds me of Meet the Jetsons (LINK)

🚕 Vlue - Cool logo, terrible name. Attempting to overthrow Uber (LINK)

HOW TO FIND STARTUP COMPETITORS

Every good investor knows that you cannot evaluate startups in a vacuum. 

There are macro factors at play, consumer trends that are evolving, and feisty competitors jostling to edge out your startup.

Picking the right startup in a competitive mix is crucial - take rideshare for example.

Being aware of competitors is the difference between investing in Sidecar (shut down in 2015) and Uber (now valued at $144,000,000,000).

But in new industries, it’s not always clear who the competitors are in the space.

Over the years, I’ve developed some of the most effective methods to pinpointing a startup’s competitors.

The first 2 are pretty basic, but #3 and #4 are a bit more interesting.

1. ASK THE FOUNDERS

We’re starting out with a Level 1 concept - go straight to the source and ask the founders who they consider their competitors to be.

I’d recommend taking it a step further by asking:

• What is the competitive edge you hold over your competitors, and how to you plan to expand that in the next 1-3 years?

• What do your competitors do better than you?

• What audience are your competitors focused on (to understand the overlap)?

• What is the difference in your pricing strategies?

• What is the difference in your product offering?

2. LOOK UP GOOGLE SEARCH RESULTS

This one is also fairly rudimentary - google search the startup you’re evaluating.

Often times, a number of their competitors will pop up as additional search results.

3. PROMPT CHATGPT

Any of the LLMs will do in this case, but asking an AI is helpful in finding under-the-radar competitors.

Results usually take it a step further and provide helpful context on what the competitor does.

The downside here is that the results will include false information - in the below example I asked ChatGPT to give me 5 competitors to Wefunder.

The AI included SeedInvest, which no longer exists (acquired by StartEngine in 2023)

Still, it’s not terrible - it nailed StartEngine + Republic. Crowdcube is a European platform and Fundable is a tiny-sized competitor that some may have missed. 

An added benefit is that after you get these results back, ask for 5 more. And another 5. Keep going until the results are no longer useful.

4. GAUGE TRACTION WITH SIMILARWEB

This one is cool - SimilarWeb is a tool used mainly by marketers to gauge search traffic & ad spend to websites.

You pop in a website and it will spit out how many visits they get, where the site traffic comes from, and tons of other interesting information.

SimilarWeb will also automatically suggest similar websites to benchmark the results against.

The suggestions sometimes aren’t as strong, because they grab them based on adjacent sites that users also visit.

What I would recommend is finding the competitors through the other methods, and then popping them into SimilarWeb.

You can get a sense of traction between the companies, especially if their business hinges on web traffic (like Wefunder’s does).

In the Wefunder example, you can see that Wefunder maintains a clear edge over Republic in terms of web traffic - this would indicate that they’re ahead in terms of traction.

I’ll get deeper into how to properly evaluate competitors in a later post - that’s it for now!