A lot of fintechs might feel the urge to skip the competition analysis. Simply because they feel they don’t have any competitors. Their product is a unique solution, so why bother with looking at what others do? Well, fintechs should worry because there is always some competition; ‘special snowflake-ness’ is an illusion.
The harsh but valuable reality of the audience overlap.
First of all, we do not want to crush your dreams of developing a unique tech solution for the financial services industry. Of course, it is possible, and we would never say otherwise. But even if your solution is one of a kind, there will always be an overlap in the audience of other solutions. This is just the way it works.
Never underestimate your competition.
Somehow, competition is underestimated by most (fintech) scale-ups. They are so focused on their own product and organisation that they don’t bother to look at other companies.
Of course, this is a missed opportunity because there is so much you can learn from your competitors. Like what they are doing, how they do it, whom they are talking to and where (geography), and last but certainly not least: what alliances they are forming.
Studying your competition is hard work. It takes effort, and not everyone is up to that. Sometimes one might get the impression that companies don’t want to know what the competition does, because they could find out that the competition is doing a better job (or find out their company is not the special snowflake they imagined it to be).
It is still in the eyes of the beholder.
One of the most important things fintechs need to realise is that it is not what the competition can or cannot do - but what they CLAIM they can do. It is all in the eyes of the beholder what your competition is.
Remember: you solve a problem for a bank. But most problems can be solved in several / more / other ways. Maybe you solve it in one way and are unique at that; you think it is the best way. But for sure there are more roads that lead to Rome.
When entering or growing into a market, most competition is from incumbents. Big technology companies have years to build relationships and have enterprise agreements with your (potential) client. Their solutions are at least as good in the eyes of the beholder. The big techs make it appear that they have the same technology (soon!) that your fintech offers. They just put it almost for free in the enterprise agreement that is already in place.
This sounds not like it’s fair, but this is what competition does to you if you ignore it.
Ooh la la: seductive positions.
Obviously, your competition analysis is linked to your positioning. It is all about asking yourselves deep questions like:
- Where do you want to place your company or brand?
- How do you want to occupy the minds and hearts of your customers?
- In what way do you distinguish your products and services from your competitors’?
Or to summarise, your competition analysis is essential to positioning your products and services in the best, most seductive way. Find an answer to the question of what problem you actually solve and why that is unique from your competition. The rest is easy now: know it and own it.
No competition, no market.
Although you might get the impression that competition is a nasty, time-consuming annoyance, it is actually a really good thing. Competition means in the end that there is a market where you can sell your products and services.
Please mind the gap between marketing and sales here as well. If you want to be successful, you must approach your competition with the joined forces from marketing and sales. Together you keep an eye on the market, make notes which companies make the same claims and check who the incumbents are at your (potential) clients. Do not forget to meet your competitors in real life at events like Money2021 or Sibos. Keep your friends close, your enemies even closer and lose the idea of being a special snowflake company.
In our next blog we will talk about Sales & Engagement approach. Subscribe here and receive our latest blog automatically in your e-mail box.
