If you were to ask me for my most important piece of advice regarding starting a business and increasing its chances of success, my answer would be competitive analysis. There is nothing wrong with competition. On the contrary: If others are trying to solve the same problem you are, that means there is a need for a solution. There is something very wrong with starting a company without doing in-depth market analysis. The absolute first step you should take as an entrepreneur is to study the market.

At the same time, it's important not to obsess over your competition. Here's how to know when to pay attention to competitors and when to ignore them:

1. Learn from wins and losses.

One of the most important slides in your investor deck and business plan is your competitive landscape. This slide should include companies that have built similar products to yours, companies that have a pitch similar to yours, and, maybe most importantly, companies that address the same target audience as you.

This is a very elementary point most people ignore. Even if your product is slightly different than another company's product--even if it is very different--if you are both targeting the same audience, and both pitching an increase in revenue or web traffic (for instance), then you are directly competing--not on the product side, but for the attention of that audience.

Once you have built a competitive landscape of every company in your space, perhaps in an Excel sheet, add another column for wins and another column for losses. It is crucial that you don't repeat the same mistakes others have made before you and that you gain from the lessons they have learned about what works.

For example, you can learn a lot from a competitor's go-to-market strategy if that company has gained significant traction. Look at their language, look at their online strategy, pay attention and take notes.

2. Just because they are doing it doesn't mean you should.

The flip side of everything above is that your competitor is no different than you, an entrepreneur building a company she hopes will succeed. Don't assume she has it any easier than you. 

Just like you might be looking at your competition and thinking, "Why are they implementing that PR strategy while we remain silent?" they are looking at you and thinking, "Why are we making so much noise if our competition is remaining under the radar?"

Just because you can do something and just because your competitor might be doing it, does not mean you should or that it is the strategic thing to do.

So while you need to pay close attention to the market and the players in your space, don't kid yourself that they know what they're doing any more than you do. 

Pay attention, take notes, see what works and what doesn't, and go with your entrepreneurial instinct that got you to where you are today. Then pay attention to the data and see if your instincts need some calibration.

3. Don't let your competitors cause paralysis by analysis.

Finally, too often I hear of companies that, out of fear of their competitors finding out about their company's growth, success, or milestones, prefer to encourage a culture of secrecy and stealth development.

Now, don't get me wrong: There is nothing wrong with staying under the radar. But if the reason you chose that strategy is out of fear of someone copying you or knowing too much, you are doing it wrong.

Stop focusing on others and what they will do with the intel they collect on you, and start focusing on execution and getting your product in the hands of your customers. The rest is all secondary.

Don't overthink things too much, because you will end up getting stuck.

Build, ship, iterate, and repeat.

Published on: Aug 22, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.