Prompt Playbook: Your First $1,000 AI Niche PART 3

In partnership with

Hey Prompt Entrepreneur,

I’ve built and launched around 30+ businesses.

Most, especially early, were complete disasters.

Over time (too much time!) I learnt why.

I kept finding markets with zero competition and thinking I was a genius.

"Nobody's doing this!" I told everyone who'd listen. "I've found a completely untapped market!"

Turns out I was being a dumbarse.

Within months I discover why nobody was doing it. There were no customers. There was no market.

Competition isn't your enemy. It's market validation delivered on a silver platter.

Let’s get started:

Red Ocean > Blue Ocean (For Us)

You've probably heard about "blue ocean strategy" - finding untapped markets with no competition. It’s a classic MBA book - pretty sure I read it during my MBA.

Basic idea is there are blue oceans and red oceans.

Red oceans are red with blood. Pretty metal huh?

The blood of new entrants and competitors who got murdered.

Blue oceans on the other hand are untapped markets. Tranquil, no competition.

Generally though a blue ocean is one that has to be created. You are the pioneer. And this means educating your customers on what the new opportunity actually is.

It’s doable. And big FMCG (fast moving consumer good) companies do it all the time. They create something and convince the public that they can’t possibly live with this new product.

Here's the problem: creating a new market requires massive budgets for education and awareness. You need to convince people they have a problem, then convince them to pay for a solution. That's market risk on top of product risk.

And even big companies fail here. Remember “New Coke”? No? Exactly.

So….we want competition risk, not market risk.

We can deal with competition risk. We can’t deal with market risk.

Enter an existing "red ocean" where people already buy solutions. Then find your own way to serve that market better. You're not creating demand - you're redirecting it. Capiche?

(I've got a whole playbook on leapfrogging competitors if you want to go deeper, but for now, let's stick to finding gaps.)

Your Competition Intelligence Analyst

Time to turn your AI into a spy. Work through your winning market from yesterday. Use this prompt with Manus or another research-capable AI:

You are a competition analyst researching solutions in the [your market] space. I need to understand what solutions exist and where they fall short.

Research current solutions by:
1. Finding the main 5-10 companies/tools in this space
2. Checking their websites, pricing, and features
3. Reading customer reviews on G2, Capterra, Trustpilot, Reddit
4. Looking for complaints in forums and social media

IMPORTANT: Focus on 3-4 star reviews. Ignore 1 and 5 star reviews.

For each competitor, tell me:
- What they do (main features)
- Pricing (be specific)
- What customers say is "good but not great" (from 3-4 star reviews)
- Specific improvements customers want
- Features people request but don't get

Then identify gaps across all competitors:
- Features nobody offers
- Price points nobody serves
- Customer segments everyone ignores
- Problems from yesterday that nobody fully solves

Focus on balanced reviews where people clearly explain what's missing.

You should by now be narrowing in on a single market. Not sure yet? Run this with multiple markets - no problem, it’ll just take more time.

Why 3-4 Star Reviews Are Gold

The basic name of the game here is to:

1. Identify competitors

2. Get their basic product line up

3. Find out what customers think about them

For the last part we’ll use reviews. Notice that we specifically exclude 1 and 5 star reviews because they're too emotional.

A 1-star review? Someone's angry, often about something specific that went wrong. We won’t get much of practical use here.

A 5-star review? Someone's delighted, often just after purchasing. Again, not very valuable information.

But a 3-4 star review? That's someone who's used the product, found value, but can articulate exactly what's missing. They've thought about it. And then bothered to write down what they think is great and what’s not so great. They're giving you a roadmap to build something better.

The Four Types of Gaps

As you analyse competitors, you'll find gaps in (roughly) four areas:

The best opportunities combine multiple gaps. Maybe there's a feature gap that specifically affects a market gap at a certain price point. Let’s go ahead and feed our competitor info into this next prompt:

Based on the competitor research above, create a gap analysis showing:

1. What ALL competitors do (table stakes - you need these to compete)
2. What SOME competitors do (current battlegrounds)  
3. What NO competitors do (your opportunities) that customers mention

Then identify the top 3 gaps that:
- Match problems from our problem density map
- Have evidence of demand (people asking for it)
- Could be built by a solopreneur
- Would make customers switch solutions

Keep it simple - I need to see opportunities so keep it tight.

This will take all the competitor research, including what customers are saying, and look for:

• Table stakes, ie. the stuff everyone does that you too have to do as a bare minimum.

• Elements that some but not all competitors are currently doing.

• Things that no-one is doing but customers are talking about it.

It’ll then synthesise this into a game plan for you - the top 3 gaps.

Your Day 3 Deliverable

By end of today, you should have:

1. List of 5-10 main competitors with what they do well/poorly

2. Gap analysis showing what's missing in the market

3. Top 3 opportunities where you could enter and win

Don't spend days building competitor databases. You need enough information to find gaps, not write a PhD thesis.

If you've found 3 clear gaps with evidence that people want them solved, you're done. Move on. We’ll pick up on this tomorrow.

Build in Public Component

Share your competitive insights:

"Day 3: Researched [market] competitors. The 3-4 star reviews told me everything.

Everyone does [common feature] but NOBODY helps with [specific gap].

Found 20+ reviews mentioning this exact problem.

Now I know where to attack. Let’s go!"

What's Next?

Tomorrow, we'll take everything you've learned - the problems, the density, the gaps - and design your market entry strategy. You'll choose which specific problem to solve and how to position yourself against the competition.

Keep Prompting,

Kyle

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