You’ll learn about five web sites that are your best source of competitive insight about new web startups. Chances are, you’ll want to bookmark these sites and add them to your collection of essential resources. But first, let’s consider why competitive research is important to any startup.

Why Do Competitive Research?

Conventional wisdom suggests that you should do competitive research for two reasons. First, as part of your business plan, to show your investors you’ve considered risks of competition and are justified in anticipating success. Second, by looking at what others are doing, you’ll refine your mission, your market positioning, and your product’s feature set. But there’s a third reason to do competitive research. One that’s more important than the others. A reason that is so important, you must do it as early as possible in your planning.

If you’re going to launch a new business, you need to find similar established businesses. Here’s why.

If you can find an existing business that others know about, it’ll be easier for others to grasp your idea without seeing it fully deployed. Whether investors, business partners, or anyone else, it’s easier to explain what you want to do if you’ve got a common reference point. Are you launching an online auction site for the produce industry? Tell them, “It’s eBay for truckloads of tomatoes.” Find a way to define your objective by describing it in contrast to others.

The best reason for doing competitive research is to make it easier to describe your project to other people.

How Special Are You?

Here’s what’s difficult. Most people want to be special. How about your business concept? Is it totally unique and special? If it is, you’ve got a problem. Either you haven’t done your research to find similar businesses. Or your business concept is truly unique, which means it’s going to be very difficult to explain and market. Ideally, your business concept is sufficiently similar to existing businesses that people will easily recognize it. And unique enough that it is defined by contrast with others. If you can’t find anyone doing something like you, look harder. Or else you might be in trouble.

How To Do Competitive Research

If you’ve already identified a well-known business that is similar to yours, you’ve got a head start. If not, you’ve got to do preliminary research. Start with keyword research. Define your keyword universe (see my article How To Do Keyword Research). Use Google to find related sites. As my article suggests, use SpyFu to see if any companies are advertising with the keywords that relate to your business.

Once you’ve found one or two possibly similar companies, try searching the following databases of startups. These are the sites that provide a definitive index of all the startups that are launched or recently funded (and some that are still in pre-launch, as well!).

CrunchBase

If you’re launching a web startup, get serious and check CrunchBase. It’s a project run under the wings of the TechCrunch blog, which is the closest thing to a trade magazine (or gossip column) for the web startup industry. The CrunchBase staff closely watches SEC Regulation “D” filings to track newly funded tech companies. CrunchBase is not complete (the newest and unfunded startups are not represented) but it’s got great profiles of all the web startups that have received significant venture capital funding. You can search CrunchBase by keyword or company name.

The best part is the CrunchBase “Competitors” coverage (in the lower left corner of any company profile). Find the profile of any company you know about and you’ll find all the similar companies that have received venture funding. With each CrunchBase profile, you may find a different set of competitors. Browse them all to see how the CrunchBase contributors view the competitive environment.

YouNoodle

Like wine and cheese, CrunchBase and YouNoodle make a good pairing (CrunchBase displays charts taken from YouNoodle but go directly to YouNoodle for a full profile).

Don’t get distracted by the YouNoodle Startup Predictor. It’s just a fun game that claims to evaluate any startup’s chance of success (don’t worry if your startup scores poorly).

The real value is the YouNoodle database of early-stage startups. YouNoodle’s database is the outgrowth of its collaboration with university entrepreneurship clubs and competitions (YouNoodle offers tools to manage business competitions, events, mailing lists and startup community development for various entrepreneurship organizations). It’s a good database of startups that have received support from established funds and mentorship organizations.

YouNoodle is easy to use. Enter your keywords into the YouNoodle “Search” feature to find businesses similar to yours.

ChubbyBrain

ChubbyBrain is a “crowdsourced” database of startups. The project was initiated by a group of analysts at a large financial services company. They’ve said they want “to democratize startup and investor information to make it more widely available.” It relies on the enthusiasm of volunteers, so it’s uneven and can be idiosyncratic. But (as of February 2009) ChubbyBrain claims its user-editable database contains over 13,000 startups and over 900 investors (VCs, angel investment groups, corporate venture groups and individuals).

You can use the ChubbyBrain Advanced Search to search for a company. Or just search by tags (like “music”). You won’t find every startup but you may find some interesting ones you don’t know about, plus commentary by volunteer editors. There’s a tab for “Competitors” for each profiled company but many profiles don’t include this information.

VentureBeat Profiles

VentureBeat Profiles is another “crowdsourced” database of startups. You’ll find spammy and adolescent garbage mixed in with the real companies because VentureBeat Profiles relies on volunteer submissions, but the real startups are there and it can be a gold mine for competitive research.

Use the VentureBeat Profiles Advanced Search feature to search their tags for your keywords. When you find a company profile, take a look at the “Similar Companies” box (middle of the right sidebar). There’s a link to “View All Similar” that will display “Competitors”, “Related Companies”, and allow you to compare the web traffic of any competitors.

KillerStartups

KillerStartups is a blog that reviews a dozen or more web startups a day. That’s thousands a year (yes, there are that many startups!). Many of the startups are of the unfunded, kitchen-table variety. You’ll see many startups that are failed, abandoned or gathering cobwebs. You might find it depressing to see how many valiant attempts never gained traction. But you may learn something from what’s there.

To do your competitive research using KillerStartups, go to the KillerStartups Tags page and enter your keywords for a tag search.

Dig Deeper

The services described above will help you find similar or related startups. You may want to dig deeper and find the names of people who work for your competitors, their web traffic stats, and what people are saying about them.

There’s always Google. But start with specialized searchable databases such as Domain Tools for domain registration (”whois”) information. LinkedIn for resumes of principals and employees. And check Quantcast, Compete.com, and Alexa for web traffic estimates (or use AttentionMeter.com for an all-in-one view of web traffic estimates). Oh, and don’t forget to search Twitter. It’s your best source for genuine comments and current opinion.

See You Later, Aggregator

You’ll want to know about three services that aim to aggregate all available business information for any web company. These services pull together business profiles, news, financials, web analytics, social footprint, marketing strategies, and other business information from a variety of online databases. Quarkbase was one of the first of this kind. KillerStartups has its Dataopedia, a very similar information aggregator. BizShark is a more recent automated information aggregator. Unlike wiki-style sites that rely on internal databases and human volunteers, Quarkbase, Dataopedia, and Bizshark pull in data from across the web, so some of it is useful and some is downright irrelevant.

These sites are worth a quick check. BizShark prominently displays competitors for any company it knows about. Quarkbase lists “Similar Sites.” And Dataopedia lists “Related Sites.”

What To Do Next?

If you’ve followed the steps outlined in this guide, you’ll likely have been compiling a list of relevant startups. Now the task is to begin to differentiate them from what you intend to offer.

Here there’s no technique that is ideal for everyone. You might use sticky notes on a whiteboard, index cards on your desk, a yellow legal pad with lines and arrows, mindmap software on your laptop, or a spreadsheet. Your goal is to organize what you’ve discovered in a way that suits your own cognitive skillset. As you arrange and rearrange your discoveries, you’ll develop an intuitive sense of the market niche.

If you use a spreadsheet, you can set up columns that quantify amount of funding, age of the company, web traffic statistics, or product price points. Sort and resort your list based on various criteria and see what picture emerges.

If you use sticky notes, index cards, or mindmap software, you can organize your discoveries by clustering similar companies and using distance or direction to indicate degrees of similarity or difference. If you are a “visual thinker,” this approach may give you the greatest insight.

Your most important analytical exercise will be to list key product or service features for each company or what’s unique about their business model or market positioning. Ultimately, you should be able to reduce your research to a company name plus one key differentiator for each company.

You’ll want to express your insights verbally, or in writing, if you intend to add to a business plan or investor pitch. As you complete your competitive research, you should be able to point to one or two companies and say, “These guys are doing something close to what I’m going to do. Here’s what’s similar and here’s what’s different.” Then you’ll be in a position to describe your plans in terms of established businesses and explain how you intend to offer better value.

When you’ve completed your competitive analysis, you’ll be well-prepared to write a business plan, make an investor pitch, and guide your startup to launch.

A Final Thought on Competitive Research

With the tips offered here, you should have no problem identifying your closest competitors. Don’t be arrogant; exercise humility and make the assumption that these competitors are at least as smart as you and that they know what they are doing. Don’t just dismiss them. These are companies that have poured resources into something very similar to what you want to do; make an effort to learn from them.

Want to help others with a suggestion? Or let me know this was useful? Leave a comment. Thanks!

The top blogs are not easy to identify. You’ll want to find the bloggers who have the most readers, who are recognized as authorities, and who get the most interesting discussions started among their readers’ comments. How will you find them? Many people assume Google is all you need. Google can get you started but Google isn’t much help in identifying the best blogs. That’s why I’m going to share with you sophisticated techniques for identifying the top blogs for any topic.

As far as I know, the top experts in Internet marketing and search engine optimization don’t know these techniques (or have kept them secret!). I’m going to reveal the details here.

What’s a Top Blog?

For those who’ve been living under a log, a blog is a web site with articles (or “posts”) that an author adds on a regular basis. Web applications for blogging make it easy for an author to add new articles without requiring technical expertise (he or she doesn’t have to love HTML). Additionally, most blogs offer an opportunity for readers to add comments (which fosters discussion of each article).

The best blogs in any subject area are written by consultants, journalists, “thought leaders,” or people who are simply obsessed with a subject and unable to keep their enthusiasm to themselves. I call it a “top blog” if the author writes frequently, if he or she has more readers and more comments than other blogs on the topic, if other bloggers frequently refer to the blog’s articles, and if the articles are frequently mentioned on Twitter or bookmarking sites such as Delicious or Digg. These are good criteria to identify the web’s authorities in any field.

Unfortunately, Google doesn’t use these criteria for its rankings. Google is good at identifying web pages where keywords of interest are used extensively and it will show you web pages that have many links from other sites. Google’s strength is finding web pages, not sites. A blog is a site that has value not just because one or two pages are useful, but because the entire site is a collection of related articles that stays fresh and relevant. Sometimes an article from a top blog will show up in Google’s search results (mixed in with every other web page that might be relevant) but most often, when you want to know the five most popular blogs that cover a particular subject area, Google will be of no help. That’s why the following techniques will be helpful.

Start With Google

I’ve written previously about how to do keyword research. If you’re searching for top blogs, you won’t need to know the entire keyword universe, just a few relevant descriptive phrases. Let’s say we are interested in finding the top blogs for “personal productivity.” Keyword research will reveal related phrases such as “time management” and “lifehacks.”

Start with a Google search for “personal productivity blogs,” “time management blogs,” or “lifehacks blogs.” With the first search, you’re in luck because several people have already compiled and posted lists of “50+ Personal Productivity Blogs You’ve Never Heard of Before” and “The Top 50 Productivity Blogs Of The Year” and “100 Blogs that Will Save You Time & Make You More Productive.” This may be all you need, if you want to casually browse a variety of blogs. But I’m going to show you techniques to identify which blogs are most influential.

Going Beyond Google

What if a Google search doesn’t give you a ready-made list of blogs in the subject area you’re searching? I’m going to give you several research techniques that will be more helpful than Google for finding blogs for a given topic.

But first, a word about “blog search engines.” Google has its own at http://blogsearch.google.com/. And there’s a dozen more “blog search engines” listed on Wikipedia. I wish I could say that one of them gives you a comprehensive list of the top blogs for any search. They don’t. Each searches blog postings and may show articles that contain the terms you’ve searched for. If you want to know which bloggers are most influential, and which blogs are most popular, the blog search engines are simply not designed to do this (with one exception, Technorati, which we’ll look at in detail). You may be able to pick out relevant blogs from the maze of articles, but most blog search engines do what Google does: they show you a list of pages, not sites, that match your keywords.

Going Deliciously Beyond Google

To identify which sites are most useful takes some human help. Fortunately, hundreds of thousands of people are already working on it, by saving and sharing their bookmarks with social bookmarking sites. I’ve found Delicious to be the most valuable. People save their web bookmarks to Delicious and tag the bookmarks with descriptive keywords. Fortunately for us, a common tag is “blog.”

Here’s how to search Delicious for blogs on any chosen topic. Create a URL like this:
http://delicious.com/tag/blog+productivity
and you’ll see a listing of all the web pages that Delicious users have marked with the tags “blog” and “productivity.”

You can also do a search using the Delicious search box, but I get better results constructing the URL myself. The advantage of Delicious (over Google) is that you get the benefit of actual humans identifying and categorizing web pages. They’ll know a blog when they see it and mark it as a blog (something Google can’t always do).

The Technorati Challenge

If you’ve tried Google and Delicious and you’re still hunting for relevant blogs, it’s time for the Technorati challenge. Technorati is the best of the blog search engines. The “challenge” is figuring out how to use it. In 2007 it was redesigned as a news portal with “mainstream” appeal and now its main page looks like AOL’s home page. There are several ways to use Technorati to find blogs by topic, all obscure.

A good place to start is the Technorati “tag search” which is buried on the Technorati Advanced Search page. For example, use the Technorati “tag search” to find posts tagged with the phrase “time management.” Technorati creates a URL that’s similar to the one we created for a Delicious tag search. The Technorati tag search URL looks like this:
http://technorati.com/r/tag/time-management
and, like Delicious, you can create the URL directly without going to the Advanced Search page if you want.

What You Get From Technorati

Technorati has volunteer editors (from blogcritics.org) for some popular tags and you may find your tag search yields a page with a nice summary article as well as a box with “Top blogs about time management.” There’s a link at the bottom of the box that may give you everything you need: “View all” top blogs.

Here’s a tip. For your search for top blogs by topic, you can skip the Technorati Advanced Search page entirely. Just create a URL like this:
http://technorati.com/blogs/tag/time-management
and you’ll see a list of blogs that Technorati users have tagged “time management.” Best of all, each blog is ranked by “authority” (the number of other blogs linking to a blog over the last six months) and shows how many “fans” the blog has among Technorati’s hardcore users.

Technorati’s list comes close to our goal of identifying the best blogs for any topic. But chances are, you’ve found other blogs that Technorati doesn’t know about (and thus won’t include in its ranking of top blogs). If that’s the case, I’m going to show you a technique for ranking any arbitrary list of blogs, whether you’ve found them on Technorati, Google, Delicious, or through random surfing. This technique is the ultimate tool for creating a master list of top blogs, ranked by importance.

Making a List of Blogs

As you find interesting blogs using Technorati, Google, Delicious, or any other means, you’ll want to compile a list. As you add each interesting blog to your list, make a note of the URL for its RSS feed. That’s the link you get when you click on an RSS button on a blog. You’ll need the RSS feed to sort the blogs by importance.

There’s a zillion ways to compile your list of blogs. You can create a simple list in a text file or spreadsheet. Just copy and paste the URLs. Some people will add each to their favorite “feed reader” software. Or add the interesting blogs to web apps like Netvibes or Google Reader. If you plan to winnow down your list of blogs to only the most influential, I don’t recommend adding them to a blog reader at this point. Instead, wait until you’ve ranked them by importance. Use a simple text file for now, or try the following “advanced technique.”

An Advanced Technique for Making a List of Blogs

If you want something a bit more efficient than a simple text file for your list of interesting blogs, you can use the Firefox web browser with the “OPML Support” add-on. This allows you to bookmark each RSS feed for each blog you view and then export an OPML file when it’s time to sort the blogs by importance.

Sorting Blogs By Importance

Whether you’ve found a ready-made list of a hundred blogs, or you’ve compiled a list from your own research, you won’t know which of these blogs are the most important and you probably won’t have time to follow them all. I’ll show you how to rank them by importance.

Your secret weapon is PostRank. This is a service that takes blogs and scores each article by number of comments, inbound links, mentions on Twitter, saves in Delicious, votes on Digg and other feedback metrics. PostRank can be confusing but you don’t need to know how it works, only how to add blogs to the service and how to check their rank.

Go to PostRank.com. You can try a search with the box that’s labeled “Find a topic, feed, or user” but chances are you’re searching for a topic that isn’t yet tracked by PostRank. And you’ve already got a list of blogs that you want to follow. You just want PostRank to analyze the blogs you’ve found and rank them by importance. To do that, you have to create a PostRank account and enter a list of the blogs you’re interested in.

Using PostRank

Set up a PostRank account (”Join Now”) and log in. Next, find the “subscriptions” link (at the top of the page) and click the “Import” tab. You can upload an OPML file (which is a fancy name for a list of blogs in a fancy format) which you might have if you were using Firefox to save a bookmark for each blog. If your list of blogs is in a simple text file, you’ll choose the “Direct Input” option and enter blog URLs line-by-line. Here’s where things get tricky. You don’t actually enter the URL of each blog. You have to enter the URL for its RSS feed (that’s the link you get when you find an RSS button on a blog).

As you add the URLs for the RSS feeds of blogs you are interested in, you can give the list a “topic” tag. You’re creating your list of “Best Blogs” for the topic you’re interested in. PostRank will need a day or two to analyze any blogs it doesn’t already know about. When you come back, you’ll find your list of blogs (under “topics”) ranked by importance. What you do next is up to you. You can start reading the posts from the most important blogs right from PostRank. Or you can export the list of blogs, for example, to Google Reader, which many people use to read the articles on their favorite blogs.

I’m indebted to Marshall Kirkpatrick at ReadWriteWeb for his articles “Comparing Six Ways to Identify Top Blogs in Any Niche” and “How to: Build a Social Media Cheat Sheet for Any Topic” which helped me develop these techniques.

Is It Worth the Effort?

If you’ve gotten this far, you’ll realize the technique described here is laborious. It’s a lot of work to find interesting blogs and enter each one into PostRank just to get a list of blogs sorted by importance. If you are only casually interested in a topic, you’ll be better served by idling browsing a few blogs at your leisure.

The technique described here pays off if it is your job to find the most influential bloggers for a given topic. It’ll be a day’s work to compile your list of top blogs, but the effort will pay off if you must monitor current affairs in any field, or contact the most-read and best-known bloggers for your marketing efforts. This method leverages your efforts and allows you to focus your attention on the blogs that matter.

Got ideas to improve this technique? Have you created an awesome “best blogs” list? Leave a comment for other readers.

The methodology I describe is unique; you won’t find this approach described in all the ebooks and articles on keyword research you’ll find on the web. My approach doesn’t require expensive membership subscriptions; it combines free data from a social bookmarking site, a web traffic measurement service, and Google user data to create a comprehensive inventory of your keyword universe.

How Effective Is It?

I developed this approach when I worked as a consultant and Internet marketing mentor for my friends Joe “Mr. Fire” Vitale and Jerry and Esther Hicks. Joe Vitale is now well-known as an “Internet marketing guru” and Jerry and Esther Hicks have become NY Times best-selling authors. Keyword research has been a foundation for the success of all my consulting clients. Over time I’ve refined the approach and I describe it in detail for the first time here. If it’s helpful to you, leave a comment and I’ll share other techniques in future articles.

Why Keyword Research?

If you are thinking about the launch of your own web startup, you’ve likely got a brainful of Web 2.0 marketing strategies in mind. These days you may be thinking about techniques for social bookmarking, encouraging friending, and various forms of viral marketing. Marketing techniques from the Web 1.0 world, such as email newsletters, pay-per-click ads, and search engine optimization may seem dull or irrelevant. But don’t rush into the future too fast. Fundamental principles from earlier days still matter. And truth is, most founders don’t give marketing sufficient attention.

Truly, how well have you researched the market sector you intend to reach? Skip any self-serving estimates of “reaching 1% of all people who book travel online” (or whatever) and spend time getting inside the minds of your potential users. Key to this is the fundamental technique of all Internet marketing: keyword research.

After completing your keyword research, you can run live tests using Google AdWords to gauge the potential market for your service (there’s more about this in the section at the end of this article, “What To Do With Your Keyword Research”).

In this article, I’ll introduce you to a keyword research methodology every web entrepreneur should use before he or she writes a business plan. Don’t leave this task for the marketing manager you plan to hire in the future. Do the research now and refine your plan accordingly.

After doing keyword research, you’ll be better prepared to direct a marketing manager or outside marketing consultant you hire in the future. More importantly, with a better understanding of the market, you’ll be able to refine your ambitions to more closely match the needs of web users.

Keyword Research First Step: What Sites Are Similar?

Where do you start? Google? This may surprise you, but I find that Google is not a good tool for searching for web sites. It’s great for finding content on web pages, but it doesn’t show a list of sites ranked by traffic, which is what I want to see when I’m looking for competitors. Instead of Google, I use TagURLs.com to search for sites by market niche. TagURLs.com is a little-known site that mashes up data from del.icio.us, the popular social bookmarking site, and Quantcast, a service that measures web traffic. Visiting TagURLs.com will help you find sites that have been tagged as similar, ranked by traffic.

You start with TagURLs.com by entering a word that describes your market niche. For example, enter the keyword “travel.” The site will display a list of all sites that have been tagged as “travel” by users of del.icio.us. Voila! An instant report of every site in your niche.

Even better, you can enter the domain name of any web site and see a list of every site that shares the same tags. So if you’ve identified a prominent site in your niche, you can see a list of all the other sites that people think are similar, ranked by traffic. TagURLs.com is a powerful market research tool.

I like to supplement TagURLs.com with information from SpyFu.com, which uses data from Google AdWords advertisers to show sites that share keywords. SpyFu.com charges a membership fee though you can get a wealth of information for free (TagURLs.com is a better place to start because it’s entirely free). Unlike TagURLs.com, which is based on tagging by del.icio.us users, the data from SpyFu.com is based on keywords that are selected by sites purchasing AdWords keyword advertising. This means you are getting a perspective on your market segment from possible competitors (hence the name SpyFu). If you dig through the busy interface, SpyFu.com offers a wealth of interesting detail (though you won’t find the traffic ranking data that is prominently featured at TagURLs.com).

After using TagURLs.com and SpyFu.com, you’ll have a comprehensive list of all the sites in your market sector.

Keyword Research Second Step: What’s Your Keyword Universe?

You likely already have a list of keywords in mind for your site. Unless you’re God incarnate, your keyword list is incomplete. There is no way you can be sure that the keywords you’d use to find your site are the ones that everyone else is likely to use. That’s where research is required. Not only will you find popular keyword phrases that you haven’t anticipated, the entire “long tail” of obscure and unanticipated keyword phrases may add up to more traffic than the most popular keyword phrases you’ve already identified. Your goal should be to identify the entire keyword universe, not just your corner of the known universe.

For example, for a project where I wanted to reach developers who use the Rails web development platform, I was sure that “Rails examples” would be the most relevant and most popular keyword phrase. As I did my keyword research, I was surprised to find that the phrase “Rails samples” was used just as frequently. If I hadn’t done the research, I would have missed reaching half the potential market!

Google AdWords is your vehicle for this journey of discovery. AdWords is the service that displays text ads alongside Google search results. Google AdWords offers a Keyword Tool (fondly known as the Google KWT) for its advertisers and anyone else who wants to use it. There are other keyword tools (such as Keyword Discovery, Wordtracker, Wordpot, and Wordze) but it’s only the AdWords Keyword Tool that gives you access to Google’s own search data.

It’s easy to use the Keyword Tool . To start, you can enter one or two of the keyword phrases you’ve already identified. There is a more powerful approach, however. The Keyword Tool gives you a button for “Website content” and suggests that you “Enter a webpage URL to find keywords related to the content on the page.” It also gives you a checkbox to “Include other pages on my site linked from this URL.” Now, just think about this. Using TagURLs.com, you’ve obtained a list of every web site in your market niche. Though Google doesn’t explain this, you can enter the URL for anyone’s site in AdWords Keyword Tool, not just your own. That means you can take your list from TagURLs.com, force the AdWords Keyword Tool to visit every page of every site in your market niche, and generate a complete list of the entire keyword universe for that niche. Whew! You are godlike.

One more tip: If there’s a Wikipedia entry that is related to your site, point the AdWords Keyword Tool at the Wikipedia page. Most Wikipedia entries are dense with relevant keywords.

Keyword Popularity

The AdWords Keyword Tool gives you more than a list of all keywords found on the web sites in your market niche (other keyword research tools can do that). The AdWords Keyword Tool shows how frequently each keyword phrase is used by people using Google; or “approximate Search Volume,” as it is labelled in the Keyword Tool results. Knowing “keyword popularity” is a superpower. You’ve got an ability to look deep into mass consciousness and see what millions of people are thinking.

The Keyword Tool also displays “Advertiser Competition” as a green bar which may be empty, or partially complete, or all green. The experts at pay-per-click marketing use this information to determine which keyword markets are saturated with competition and which keyword phrases are popular but overlooked by advertisers (thus offering opportunities for generating traffic at low cost). You can combine the “keyword popularity” rankings with the Advertiser Competition “green bar” to get ideas for undeveloped markets.

Organize Your Keywords

Unless your market niche is narrow, you may find that your keyword universe is huge. You’ll want to organize your keywords by “keyword cluster.” Looking at a list of keywords, you’ll see groups of keywords that are related; these are your “clusters.”

There are many ways that keywords may be similar and clusters can be differentiated. One powerful approach is organization by “persona.” Persona is an analytical concept often used in interaction design (IxD) or user-centered design. We imagine different user types based on similar behavior, values, desires, and limitations of the user; these are “personas.” By clustering keywords based on personas, we begin the process of identifying market segmentation and we take crucial steps toward designing our product or web application.

I recently helped a client who is launching a web startup to serve people who are recovering from alcohol addiction. His keyword universe is huge. As he looked at a very long list of keywords, he saw an opportunity to cluster keywords by persona. Some keyword phrases were entered by people who were in the early stages of identifying a problem with alcohol abuse (”how to stop drinking”, “how to quit drinking”). Other search phrases were entered by relatives or partners of an alcoholic (”dealing with alcoholic”, “alcoholic husband”). Other phrases were entered by people who had begun a recovery program or people in the helping professions looking for resources for clients. By segregating keywords by persona and comparing keyword popularity, my client was able to determine market opportunities and refine his business plan and application design.

I suggest that you copy the keyword suggestions from the AdWords Keyword Tool and paste them into a text document or spreadsheet. Then copy and paste the keyword phrases to organize them by clusters.

What To Do With Your Keyword Research

Depending on your market niche, you may discover a dozen to a hundred keyword phrases that real people are using every day to find sites like yours.

The first use of the research should be to brainstorm. Have you learned anything new about your potential market? Have you discovered new market opportunities you hadn’t anticipated? Are there changes you might make to your business plan, now that you’ve seen what actual users are searching for?

Now that you’ve defined your keyword universe, turn around and start searching on Google with the phrases you’ve discovered. What content is out there? Are there business development or marketing opportunities? Are there forums, blogs, publications, or meetups where you can connect with potential users?

The most powerful use of your keyword research can be to gauge the market potential for your business, using a temporary web site and Google AdWords to test your concept and offer. Eric Ries, a Venture Advisor at Kleiner Perkins Caufield & Byers, and a former startup CTO, describes this technique in detail in his blog article “Using AdWords to Assess Demand for Your New Online Service, Step-by-Step.” Don’t miss the opportunity to get real-world market data before you begin development!

Your keyword research can have other practical uses. You may want to register domain names based on the keyword phrases you’ve found. You may already have a cute Web 2.0 domain name composed of pleasant nonsense syllables (you don’t?) but you might want to register other domains and forward traffic or redeploy services, especially if you can tailor your content or services to match what people are searching for.

And lastly, use your “Web 1.0″ keyword research to plan your Web 2.0 marketing strategy. Search del.icio.us and other social bookmarking sites using the tags you’ve discovered. Search Twitter to find people who are using your keyword phrases. Try the same on other social networking sites that use tags to identify people’s interest. Keyword research will yield a richer and more effective marketing effort when you launch.

Let me know how it works for you by leaving a comment below.