How to do competitor analysis for a business plan
A repeatable method for mapping direct, indirect and substitute competitors — plus the four-axis matrix investors actually look at and the research tools that surface what competitors won't tell you.
'We have no competition' is the single fastest way to get a business plan binned. It signals you haven't looked, or worse, that you've looked and don't understand what counts as a competitor.
Competitor analysis done well does three things: it sharpens your positioning, it surfaces real pricing and packaging data, and it shows investors you've thought clearly about where you actually win. This guide walks through the method we use at Billionideas for every client engagement.
The three types of competitors
Direct competitors: companies that do roughly the same thing for roughly the same customer. If a buyer is choosing between you and them, they're direct.
Indirect competitors: different solution, same underlying problem. (For a project-management SaaS, this might be a generic spreadsheet workflow.)
Substitutes: the 'do nothing' or 'work around it' alternative. Often the largest competitor any new product faces.
A good analysis covers 3–5 direct, 2–3 indirect, and 1 substitute. Anything less is incomplete; anything more is procrastination.
Where to actually find competitor information
Pricing: their website (start at the /pricing page; if hidden, check archive.org for older versions). G2 and Capterra reviews often quote actual paid prices.
Positioning: their homepage hero copy, their LinkedIn ads (visible via the Ad Library), and the title tags of their top-ranking pages (use Ahrefs or Semrush free tier).
Traction: Crunchbase for funding, LinkedIn employee count over time, SimilarWeb for traffic estimates. None of these are perfectly accurate; triangulate.
Customer sentiment: G2 / Capterra / TrustPilot reviews, then read Reddit and indie forums where their customers complain unfiltered. The complaints are where your wedge lives.
Step by step
- 01
Brainstorm 15 candidate competitors
Use Google ('best X tool 2026'), G2 category pages, Product Hunt, and conversations with potential customers ('what else did you consider?'). Cast a wide net first — you'll narrow next.
- 02
Filter to the final 5–8
Direct: 3–5 of the most credible head-to-head alternatives. Indirect: 2–3 different solutions to the same problem. Substitute: 1. If two competitors are nearly identical, keep only the more established one.
- 03
Build a comparison spreadsheet with the right columns
Pricing, target customer, key features (top 5 only), positioning statement, funding raised, employee count, public traction signals, primary acquisition channel. Don't add columns just because — every column needs to inform a decision.
- 04
Pull pricing the smart way
Visit their site as a logged-out user. If pricing is hidden, request a demo with a real name (or check Glassdoor 'interview process' reviews where candidates often disclose pricing). Note any annual vs monthly discounts.
- 05
Read 20 reviews per direct competitor
G2 and Capterra. Filter to recent reviews (last 12 months) and read the 'cons' section first. Patterns emerge fast — 3 competitors all getting complained about for the same thing is a wedge.
- 06
Build the 2x2 positioning matrix
Two axes that genuinely matter to buyers. Plot every competitor. Mark where you sit. If you're in a crowded corner, change axes — the matrix exists to show where you uniquely win.
- 07
Write the competition section for the plan
One short paragraph per competitor (name, what they do well, where you win), then the 2x2, then a one-paragraph closing on why your positioning is defensible. Total: one page.
- 08
Set up ongoing monitoring
Google Alerts for each competitor name and the founder's name. Visualping on their /pricing and /features pages. Subscribe to their newsletter. Competitor intel goes stale fast — quarterly refresh minimum.
Key takeaways
- Always cover direct, indirect, and substitute. 'We have no competition' kills credibility.
- Build a 2x2 matrix on two axes that actually differentiate the category. Skip 14-row feature tables.
- Read the cons in 20 reviews per competitor — that's where your wedge hides.
- Triangulate funding, traffic and headcount data; no single source is fully accurate.
- Set ongoing monitoring (Google Alerts, Visualping). Competitor intel goes stale within a quarter.
Frequently asked questions
+What if I genuinely have no direct competitors?
You almost certainly have substitutes (the manual workaround, the spreadsheet, the do-nothing). Lead with those. 'Our biggest competitor is Excel and the 9 hours a week customers spend in it' is a strong, credible answer.
+Should I name competitors in the deck?
Yes, almost always. Investors will Google your space immediately after the meeting; naming the obvious competitors shows you've done the work. Hiding them looks evasive.
+What if a competitor is much bigger than us?
Acknowledge it and explain why size hurts them in your wedge. Big companies move slowly, can't serve narrow segments profitably, and accumulate technical debt. A specific 'they can't follow us here because…' answer is much stronger than pretending they aren't there.
+Should the competitor analysis include indirect competitors like Notion or Excel?
If your customer would realistically use Notion or Excel instead of your product, yes — they're substitutes. The test is: where does the money go today if you don't exist? That's a competitor, regardless of category.
+How often should I redo competitor analysis?
Quarterly for active monitoring (pricing, positioning, funding), annually for a full re-baselining. Material changes (a competitor raising a big round, launching a competing feature, getting acquired) should trigger an immediate update of the matrix.
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