Explore how artificial intelligence, specifically the ChatGPT model, can accelerate your understanding of industry dynamics, competition, and customer preferences. I’m sharing a few ideas to deploy AI for competitive analysis and customer behavior study. This blog doesn't merely inform; it empowers you to transform your startup strategy and research approach.
Entrepreneurs need to have an expansive mental model about the industry their startup belongs to, who their competitors are, and the users they are serving. AI can accelerate that process for you. I have been using ChatGPT to build mental models about these aspects. With the proper prompting and in-context learning techniques, I was able to get decent answers to get up to speed quickly. Don’t get me wrong. You still need to sift through many reports and interview users, but AI can reduce your weeks' worth of research into a few hours. I’m talking here about the possibilities. I may address in different writings how to achieve each in more detail.
Exploring Industry Trends and Sentiments
AI can analyze vast social media data to identify industry trends, discussions, and sentiments. NLP can analyze data you import from platforms like Reddit or Twitter, revealing customers' pain points, wishes, and reactions. Gain valuable insights for your startup idea and find your market niche.
Start by asking basic industry questions. NLP algorithms such as ChatGPT are as good as the questions you ask and the instructions you provide. I usually use the Q&A forking technique; each time it explains a concept I’m unfamiliar with, I ask it to give me a formal definition with a specific breakdown to get to the bottom.
Create a mental model that represents how the industry works based on ChatGPT answers.
I keep asking questions and creating a complete mental model of the industry in 1-3 hours.
Conducting Competitive Analysis
You can use AI to automate the process of competitive analysis. It can sift through online content, product reviews, blog posts, and news articles about your competitors, providing you with a structured analysis of their strengths, weaknesses, and customer opinions. ChatGPT can process and summarize large amounts of text data, saving time and providing valuable insights. I’ve been experimenting with a lot of in-context learning for ChatGPT. I could crawl the latest competitor's website and use it in my Q&A about a specific competitor. I’m still exploring the limits of in-context learning, but I see myself collecting all the latest details about a competitor and using this data in advanced Q&A sessions with ChatGPT.
A few helpful steps I typically use in my competitive analysis
Provide a summarized description of the industry, what products usually do, target users, and problems that the products solve for these users.
Ask ChatGPT to list all the companies that provide similar products in the same industry. Your previous description matters a lot.
Ask ChatGPT to describe each company based on the dimensions you are interested in, such as the founding year, funding they got, significant events, etc.
📝Many of the data points I’m interested in about my competition don’t exist on publicly available pages. I retrieve them and format them in the form of Q&A; I then feed this into ChatGPT as in-context data and ask about my competitors. For example, I get startup funding from CrunchBase. I then format this data to perform quick in-context training before asking ChatGPT about my potential competitors.
Understanding Customer Behavior and Preferences
AI can help you understand customer behavior and preferences. You need to uncover several layers about your target customers. Here are two examples of using ChatGPT to understand your customers more effectively.
You can understand customers' behavior and why they would buy a product like yours. I asked ChatGPT why companies need to have this product category. I wondered about possible laws and regulations making it mandatory. I also asked what is common among companies that require it; I will usually be more specific about what dimensions I’m looking for, such as employee count, IT systems, geography, etc.
You also can summarize the latest sentiment about competing products. In-context learning comes to play again here! I typically collect enough data from different online forums and use it to feed ChatGPT and ask the right questions, such as what problems customers generally are complaining about in the competing products.
AI and language models like ChatGPT are reshaping the entrepreneurial landscape, becoming essential tools for navigating the intricate startup world. Harnessing these technologies equips you with a competitive edge, transforming challenges into opportunities for growth and success. For insightful updates on emerging trends and transformative technologies, subscribe to our 'Looking Ahead' newsletter today.