Competitor Intelligence for fintech startups - Necessary evil?

Every business plan template / example that I have seen in the past several years always has a section around “Competitor Analysis”. Typical questions revolve around two areas:

1)  Who are the competitors to your offering? and

2)  How is what you are building different from what competition is doing? 

In all the business plans that I have personally worked on in the past several years, the section on “Competitor Analysis” has always been the hardest. Again, the top three reasons were

1)  In some cases we didn’t know for sure why / how we were different ; and even if it all we were different or just a ‘Me too’!

2)  In some cases we didn’t know for sure what the competition was really trying to do since it was an evolving industry segment,

3)  In some cases we thought no one in the world had done (yet) what we were trying to do, so there was no question of competition!

I’d guess it is the same for many fintech startups. Creating and articulating a section on Competitor Analysis / Intelligence will be an ordeal simply because:

• Things are moving and evolving so dynamically every day in the fintech world. Almost every day I wake up to some new fintech idea / solution which is cool and makes you go “Wow”
• There are just so many global innovations / disruptions that it is so hard to track. If you don't spend time every day to keep yourseld updated, chances are you've missed some important update..
• There are just so many ideas from all over the world, and technology that makes it easy to implement and release your app / solution
• There are just so many partnerships / consortium based collaborations that it becomes tough to say where the industry starts or ends (For e.g: Is it part of banking? Is it part of payments? Is it part of retail? It is part of mobility? Is it part of telecom?).
• There are just so many country specific requirements that every region has a local version that is customized to the local culture / usage scenarios

So, how then do you actually do you gather the much needed competitor intelligence to create a Competitor Analysis slide?

How do you define competition in an era where people already talk about blockchain, digital wallets, mobile payments, etc. etc., but you still don't see mass consumer adoption?

Is it even necessary to spend so much time and effort to track and monitor what is happening in the fintech environment?

Do you not run the risk of analysis paralysis with so much data and insights on what others are doing all over the world?

Well the short answer is Yes and No, and that is what I call it the Necessary Evil..

Competitor intelligence for fintech startups is absolutely necessary because it helps you to 

* Keep track of industry trends

* Get a realistic view of your chance of success; and modify your business / GTM (Go-To-Market) strategy accordingly

* Get a pulse of the market situation and consumer sentiment based on response to competition

* Stay updated on law and regulations ; and how it can affect what you are trying to do

* Influence hiring decisions as you might want to hire someone who was responsible for the success / failure of an initiative

* Give you new ideas for your solution / launch roadmap - Both in terms of what you should do / should not do

On the other hand, competitor intelligence comes with its share of bane

* It takes time and effort on a daily basis, and someone needs to do it regularly. And the trade-off between whether you spend time on your solution v/s studying the market can be a tough one

* Sometimes it can be de-motivating to see that what you thought, planned and wished to do is already being done by someone somewhere - So it is all about timing

* Last but not least, it can cloud your rational thought and introduce unconcious bias in what you are trying to do. So unless you are a very logical and neutral person, it is easy to get carried away by what media / others say.

What is your view on competitior analysis / intelligence for fintech startups? Should you do it? If yes, How much is too much? 

Leave a comment to let me know..