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> Meanwhile I can't even find one ideas. Here's the cheat code for you: look at what businesses are constantly spending money on, and you will find plenty of b

by jmstfv 7y ago

> Meanwhile I can't even find one ideas. Here's the cheat code for you: look at what businesses are constantly spending money on, and you will find plenty of business ideas. There will be competition, most likely a lot of it, but don't let that deter you. Competition means there's money to be made in the market, and people are already aware of the problem so that you don't have to educate them on why they need a solution (you will have to clearly communicate why your product is better, though). When going after existing markets, you basically swap an idea validation challenge with a sales and marketing challenge. Before launching my business, I had a misconception that if you're already solving a problem, you don't have to do much marketing and sales - WRONG! You still have to get in front of existing customers, repeatedly. Going after an existing market doesn't mean you have to launch a carbon copy of an existing product. You can differentiate by a price (probably not a good idea), by a combination of features, or by having a polished UI/UX/Developer experience. If your competitors suck, you can differentiate by virtue of not being broken (e.g. "Product X just works" can be your shtick). You can also out-market your competition (here's the one thing they don't want you to know: better products don't usually win over better-marketed products). Why businesses you might ask? Because they're not reluctant to part with their money if you can either save or make them money. You will have a higher average revenue per user (ARPU), which means you can spend more money on acquiring customers (CAC is the term-of-art) than if you were in B2C. You will also need fewer customers to reach your revenue goals, which will translate into less support. If your goal is to build a sustainable business, I think this is the most optimal approach to take. Just make sure you're not in the winner-takes-all type of market.

freedomben 7y ago
Thanks for your post. If you're launching a new product, how do you compete with products that have loads of features? At a previous startup I worked for we wrote tax software, which was a well established and entrenched market. Our big thing was really cloud-based, but acquiring customers was often really hard because we were always missing that one feature that people really cared about (and it's never the same feature).
- jmstfv 7y ago
  > If you're launching a new product, how do you compete with products that have loads of features? One way to compete with incumbents, in the beginning, is by niching down, and offering things they can't. Using your tax software example, it'd make sense to start with a single persona first (e.g. Tax Software for US-based freelancers). By building a tool for the specific audience, you can offer an experience a generic tool can't (i.e. a sole proprietor doesn't care much about corporate income taxes, excise taxes, etc.). You will also have less competition if you decide to go down the paid acquisition route. FWIW, I have noticed that some subset of my customers only use a particular set of features, and don't care much about the rest. Another advantage of focusing on a niche is that people with similar characteristics tend to congregate in a handful of communities, which makes it relatively easier to reach them. At some point, you can hopefully take advantage of word of mouth, and that is an incredibly powerful way of acquiring new customers. Also, when you're the person who built the service, you can offer support to customers in a way your established competitors simply can't. Caring about things is a competitive advantage. Make no mistake about it: it's going to be incredibly hard. However, by going after the existing market, you minimize chances of market mistake, which is costlier than a product mistake (i.e. you increase your odds of survival). P.S. Having an existing audience makes things easier. People buy from people they know, trust, and like, even if your offering isn't the best out there.
- fourseventy 7y ago
  If you are launching a new product you can't compete against entrenched competition in breadth of features. You need to compete against them by finding a small niche use case or feature and becoming the best piece of software for that niche. Using your tax software example, you would want to become the best tax software ever for pet store owners (random example), then you capture 100% of the pet store market and move out from there.
- akiselev 7y ago
  Few successful business start out with loads of features. They start out with the most important subset of features they need to get enough clients in the beginning to survive. Then come the enterprise contracts strong arming them into developing niche features that almost no one else needs, growth targets that requiring catering to lots of individual users who each need their own niche feature X and Y to sell it to their boss, and competitors that require them to differentiate just to stay shiny in customers' eyes. The general advice for startups is to find a niche. Even if they're VC funded, they're supposed to find a niche at first because thats a way of delaying all that expensive development they will have to do to catch up with competitors until they can afford it. The key is that feature development productivity is inverse to company size and revenue. The bigger they are, the more customers they have, and the more money they make, the more time and effort they have to spend just keeping everyone aware of changes, let alone actually deciding how to move forward and executing. This is the complete opposite of almost every other industry where economies of scale dominate so unless your niche has extreme network effects like Google's Search business or Facebook's social network, there will always be room for more competition.
harrisreynolds 7y ago
This is a really good comment. I would only add, don't go into a market that is too mature unless you have a very unique or niche approach. Examples include CRM and Data visualization. The CRM market is 20 years old so unless you are serving a vertical that is highly underserved for some bizarre reason you could build it but no one would come. I built Chartly in the data viz market, but wish I would have instead spend the time on Webase [1] which, as a no-code platform, is way earlier in the market lifecycle. [1] https://www.webase.com https://www.webase.com
chrisfrantz 7y ago
My favorite tool for this example is Whimsical. How many mind mapping and flow chart tools are there? Whimsical built a new one with way less features and I’m suddenly creating flowcharts again because of how refined it is. Refined because all the cruft has been stripped out. Choose a business process AVD build the MVP of it. The key here is also that it has to be lightning fast with a modern a aesthetic. But use something like Tailwind and prioritize the speed of every user interaction and you have a winner.

by jmstfv 7y ago

freedomben 7y ago

Thanks for your post. If you're launching a new product, how do you compete with products that have loads of features? At a previous startup I worked for we wrote tax software, which was a well established and entrenched market. Our big thing was really cloud-based, but acquiring customers was often really hard because we were always missing that one feature that people really cared about (and it's never the same feature).

jmstfv 7y ago
> If you're launching a new product, how do you compete with products that have loads of features? One way to compete with incumbents, in the beginning, is by niching down, and offering things they can't. Using your tax software example, it'd make sense to start with a single persona first (e.g. Tax Software for US-based freelancers). By building a tool for the specific audience, you can offer an experience a generic tool can't (i.e. a sole proprietor doesn't care much about corporate income taxes, excise taxes, etc.). You will also have less competition if you decide to go down the paid acquisition route. FWIW, I have noticed that some subset of my customers only use a particular set of features, and don't care much about the rest. Another advantage of focusing on a niche is that people with similar characteristics tend to congregate in a handful of communities, which makes it relatively easier to reach them. At some point, you can hopefully take advantage of word of mouth, and that is an incredibly powerful way of acquiring new customers. Also, when you're the person who built the service, you can offer support to customers in a way your established competitors simply can't. Caring about things is a competitive advantage. Make no mistake about it: it's going to be incredibly hard. However, by going after the existing market, you minimize chances of market mistake, which is costlier than a product mistake (i.e. you increase your odds of survival). P.S. Having an existing audience makes things easier. People buy from people they know, trust, and like, even if your offering isn't the best out there.
fourseventy 7y ago
If you are launching a new product you can't compete against entrenched competition in breadth of features. You need to compete against them by finding a small niche use case or feature and becoming the best piece of software for that niche. Using your tax software example, you would want to become the best tax software ever for pet store owners (random example), then you capture 100% of the pet store market and move out from there.
akiselev 7y ago
Few successful business start out with loads of features. They start out with the most important subset of features they need to get enough clients in the beginning to survive. Then come the enterprise contracts strong arming them into developing niche features that almost no one else needs, growth targets that requiring catering to lots of individual users who each need their own niche feature X and Y to sell it to their boss, and competitors that require them to differentiate just to stay shiny in customers' eyes. The general advice for startups is to find a niche. Even if they're VC funded, they're supposed to find a niche at first because thats a way of delaying all that expensive development they will have to do to catch up with competitors until they can afford it. The key is that feature development productivity is inverse to company size and revenue. The bigger they are, the more customers they have, and the more money they make, the more time and effort they have to spend just keeping everyone aware of changes, let alone actually deciding how to move forward and executing. This is the complete opposite of almost every other industry where economies of scale dominate so unless your niche has extreme network effects like Google's Search business or Facebook's social network, there will always be room for more competition.

harrisreynolds 7y ago

This is a really good comment. I would only add, don't go into a market that is too mature unless you have a very unique or niche approach. Examples include CRM and Data visualization. The CRM market is 20 years old so unless you are serving a vertical that is highly underserved for some bizarre reason you could build it but no one would come. I built Chartly in the data viz market, but wish I would have instead spend the time on Webase [1] which, as a no-code platform, is way earlier in the market lifecycle. [1] https://www.webase.com https://www.webase.com

chrisfrantz 7y ago

My favorite tool for this example is Whimsical. How many mind mapping and flow chart tools are there? Whimsical built a new one with way less features and I’m suddenly creating flowcharts again because of how refined it is. Refined because all the cruft has been stripped out. Choose a business process AVD build the MVP of it. The key here is also that it has to be lightning fast with a modern a aesthetic. But use something like Tailwind and prioritize the speed of every user interaction and you have a winner.