business-planLately I’ve seem much emphasis on the development of cloud applications with several clients (web desktop, mobile, etc) and that can even in some more sophisticated cases interface with another devices in order to control them (the internet of things). I’ve been preparing to build one of these, but it gets complicated to select which app to build.
The problem is, many of the ideas I thought about, I go google about it, and there is already at least one app to achieve that goal I had in mind and this makes life really complicated.
One of the examples I searched, there were in my country 550 thousand companies of the segment that could be potential customers of the app, and in my city there were 1500 companies. In that case, selling for 500 which I think is already a big number, but it still represents just 0,09% of the national market share and 0,27% of the city market share. Those are small numbers from my point of view.
So my question is: if I have the idea to develop some app to accomplish some goal, is it always a waste of time when there are another apps lurking around or in cases where there are tons of customers available, like the numbers I gave, it becomes possible to have success even though there are already apps in place?
My point of view is that since there is some app already, I’ll have a hard time with marketing. The reason is because the app will have less impact, since it won’t be something new for the customers. Is that right?
The first player isn’t always the best player.
The point is that products are successful based on their ability to solve customers’ problems, not on their originality. The business world isn’t like the contemporary art world, where originality is the only form of merit (and even in art, something done well is better than something done first).
If your app is appreciably different/superior to the ones that already exist, then it’s worth it. Can you justify to yourself, your investors, and your customers, that your app solves problems better than the competitor, or solves more nuanced problems, or solves problems in a new way? If so, go for it.
Use the work your competitors have done to your advantage. They’ve already broken in the idea, found out some of it’s strengths and weaknesses, and they’ve likely already invested in their particular strategy or market. You have the freedom to benefit from what they’ve done. Just do your research and understand what exactly you’re up against.
Competition rarely kills startups. The thing that does, is building unneeded products.
If you are looking into a certain domain (or problem) and you see no competition, there could be only three options-
1) You are the smartest guy on earth.
2) There is no real need for such solution / there is no problem at all. or
3) You are not searching well enough. So some competition is actually good. It means that there is a viable market you can reach.
The fact is that if there is a real problem, it has some existing solutions (They can even be not high-tech related). You need to ask yourself whether you can solve it significantly better than any other solution.
Try to fill the following sentence: My product is a 10X better solution for the ___ problem, for the following customers: _____.
If you can’t fill this sentence, you probably can’t build a startup. Even if you can fill it, you still need to check how big is your potential market.
The bottom line is that startups are usually a “winner takes it all” kind of business. And to be the winner you need to be significantly better than any other solution. Some paid products can survive and be profitable for a while even without being significantly better than any other alternative, but that works only when you can be profitable from yearly on and probably only for a limited time.
Looking at a huge market and aiming for a small percentage of it without any concrete plan of how you obtain this market share is not a valid approach. You’ll be able to get this market share only by offering the far best solution for a certain group of users in this huge market.
I agree with blaineh and would add that sometimes it’s helpful to develop a new app in a marketplace that already has some apps. It looks like you are targeting businesses and they can be slow to change, but you already know that these businesses are willing to pay for an app because this area has successful apps.
Find out the strengths and weaknesses of the existing apps, and make your app address their weaknesses. You may be able to benefit by your competition’s marketing since they already know about the general product and all you have to do is promote the one specific thing that sets your app apart.
Don’t worry too much about market share and potential when starting up. If existing apps are successful, then there is room for a new app to overtake them.
Yes, it’s possible. There are literally scores of web-based reading comprehension programs out there for schools, and most of them do fine. Finale and Sibelius co-existed for 15 years before one of them was finally beat by (as I understand it) bad management (not competition). There are many flashlight apps, and many of them are profitable. (Many of them also include adware and spyware, but that is a different discussion).
This is all to say that even in the famously “winner takes all” software realm, there is room for competitors to exist and grow alongside each other. Having similar competitors can even be a good thing - it indicates that there is a market there. And remember that competitors also serve to grow the segment of the population that utilizes your market space generally.
That said, I agree with @Davidraz. You definitely DO need a way to differentiate yourself. Be much better than your competitors at some aspect, and target the users who really need that.
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