Is My Market Saturated

When coming up with a new startup or business idea one of the key questions of validation needs to be "is my market saturated?"

Is My Market Saturated
Is My Market Saturated - Use Competitor Analysis

When coming up with a new startup or business idea one of the key questions of validation needs to be "is my market saturated?". This is an incredibly important question because it determines whether your idea is even feasible. If you are entering a saturated market you need to be confident that you can steal existing market share from your competitors which can be a very difficult task.

How To Tell If Your Market Is Saturated

The most important thing that will drive many of these discussion points is competitor analysis. Through analyzing competitors you can gain an immense amount of information on the current product landscape, how most customers in the market interact with your competitors, and hopefully even some ways to take over market share from your competition.

Identify market saturation through competitor analysis

Identify Your Competitors

This step may seem obvious, but many people take shortcuts because they are excited about executing on their ideas. This is a very large topic to cover in one blog post but some quick notes on how to identify your competitors include:

  1. Ask your prospective customers if they use any similar products
  2. Search general phrases in google and see who comes up
  3. Extend this into long tail and niche searches and see if any smaller competitors come up
  4. Check keyword competition in Ads

If your product is unique enough you may think that you have no direct competitors and that you are good to go. This is a potentially fatal mistake. It is incredibly important to identify your indirect competitors as well. Competitors who operate in the same market space as you even if the products are not the same. You and these indirect competitors are most still competing for the same customer budget and will be competing for the same customers attention.

Understand How Your Competitors Position Themselves

After identifying your competitors you want to delve into as much publically available information as you can about them. Doing so allows you to build a more comprehensive representation of what your prospective market looks like and how businesses get in front of them.

  1. Do they have a web presence?
  2. What does their website look like?
  3. How comprehensive is their information?
  4. What is the tone of their content?
  5. Are they educating?
  6. Are they utilizing social media?
  7. Are they advertising? Both digital and traditional.
  8. Are they leveraging other sales channels such as partnerships, affiliates etc.
  9. Are customers publically engaging with them
  10. and a 1000 other considerations that we can delve into another time.
Is this cat one of your competitors?

How Are My Competitors Performing

Now we are getting somewhere. With all that context we want to identify how well your competitors are performing. Some simple metrics to research include any public sales info, keyword trends, and customers traffic trends. Almost all of the keyword and website data is very easily accessible using any of the public traffic tools.

The main consideration here is is to identify trends across a majority set of your competitors. If one is doing poorly, that reflects on them. If 80% of the competitors are doing poorly, that is probably reflective of the market.

Is There User or Sale Growth

Finally, we can leverage our recent competitor performance information along side general market statistics that are available to identify if their is growth in your market. This is really the key to determine if your market is saturated or not.

If the data from the previous section is showing that the majority of your competitors are seeing stable or even lowering conversion or traffic trends, then we have a very strong indicator of market saturation.

Is It Possible To Enter a Saturated Market

If you determined you are in fact in a saturated market, you are probably wondering if their is any hope. Can you succeed in a saturated market? Absolutely.

Sunshine bath
You can succeed in a saturated market

You will have some slightly different considerations from a product in a growth market that you will want to be sure about before continuing.

Is My Product Better

This is important but probably slightly less important than you think. The benefits of actually having a better product really lie in you the owner being confident in what you are doing. The more confident you are in your product the better suited you will be to tackle the next sections.

Can I Convince Customers My Product Is Better

Being better is second to having the ability to convince your prospective customers that you are better. If you can convince customers that you are better than it is showing a few key things:

  1. You are successfully getting in front of them. This is a big challenge with so much competition
  2. Your phrasing is compelling enough that you are standing out in a positive way

Is That Enough For A Customer To Make A Change

Battling inertia is a hell of a challenge. In a saturated market there is much less gaining of day 1 customers and much more of stealing customers from competitors. Customers get so embedded into their processes and existing products that any small margins of 'being better' get instantly beaten out by the sheer hassle of making a change. You have to be so compelling that your benefit can not be ignored.


There is a fair bit of work that goes into identifying market saturation. Your gut instinct will go a long way but you can strongly utilize competitor analysis to validate. If you asked yourself, is my market saturated, and came out the other side with "yes". It is not the end of the world. It just means your approach and expectations need to be aligned with the realities of the market.