During the past couple of weeks, I have coached two young entrepreneurs who are considering entering the market with new products and services. The first entrepreneur has developed a unique concept in the communications/Internet space. He has found a competitor who is offering something similar, but the company appears to be working from an older business-and-technology model.

My first question was to ask him what he knew about the competitor and the product offering. His response was limited: "I looked at the Web site and completed a short online demo, but it is difficult to get a feel for the breadth of the product that the competitor is offering."

The second entrepreneur is proposing a new product-and-services company in the real-estate market. He has done a considerable amount of research, written a comprehensive business plan and has begun contacting potential partners in his area. His business assumptions are based upon a fairly narrow set of data (his local market) and therefore include a significant amount of risk, as the company would need to expand beyond the "hometown" geography.

In both cases, the aspiring entrepreneurs have done great work developing their offerings, but they lack competitive intelligence. Their risk is similar: After a lot of work, time and the expenditure of resources, they could enter the market only to find that they are not competitive.

The first young man needs to purchase a copy of the competitive offering, give it a thorough test and determine how he can differentiate his product in the marketplace. He also should talk to some of the competitor's customers about their purchase and their satisfaction with the product and service to determine if there are missing features in the competitive offering. Our second entrepreneur should travel to a different place to conduct a second test of the product and the market. In his case, he has an ideal market-test opportunity in Scottsdale, Ariz. — the one city that has developed a full-scale rollout of the proposed product/service. He also can also meet with partners in that market and determine how their business relationships are structured.

Some of the options that exist for building competitive intelligence are:

1. Purchase your competitors' products. You can count on your competitor buying your product as soon as you enter the market.

2. Contact industry trade associations. Your competitors are most likely members of the associations. In addition to competitive information, you will also find significant customer data, information on industry meetings and conferences, research reports, etc.

3. Utilize search engines. Do not stop with one engine. Search under the names of competitors, products, etc.

4. Network. Talk with people in the industry, organize your thoughts and have key questions in mind when you interact. Ask them whom else you should contact.

5. Search government Web sites.

6. Study consultant reports. Most of these reports require a subscription, but you may be able to gain access by contacting the consultancy directly or through someone who is a paying subscriber. Search under "white papers" on the Internet for hundreds of reports addressing various topics.

7. Become familiar with newsgroups and online media sources.

8. Study public companies in your market. Data on markets and customers is sometimes more transparent in the public markets than in privately held companies.

Along these lines, we can all learn a lesson from sports teams. Coaches and players spend days and sometimes weeks in preparation for a competitive match. The competition's strengths and weaknesses are assessed, strategies are developed to win, and contingencies are rehearsed should events turn in the wrong direction.

If entrepreneurs would focus with the same intensity on their competition, far fewer companies would fail in the marketplace. Time to market would be shortened and the amount of money wasted on missteps in the market would be reduced.

Gary Williams is affiliated with the BYU Center for Entrepreneurship. He can be reached via e-mail at cfe@byu.edu.