Build a product in an already established market

welcome back to another video about running a profitable sas business i wonder if you've ever been in this situation you get a great idea for sas business you feel inspired and motivated and you start doing a couple of searches on google to your disappointment you realize that there are a series of similar products out there already and that many of them look really good and well established now you probably went from being excited and motivated to being bummed out you let go of the idea and you probably repeated the whole thing again a week after sounds familiar i've tried this so many times that i stopped counting a long time ago but is this really the right thing to do though just giving up like that should we really be afraid of an established market in this video i'll break this situation down for you and explain what you can do to verify if your idea is still worth something even if the market is already established let's get started if you're new to this channel i just want to say welcome here let me introduce myself my name is simon horberg i'm a software engineer and sas founder and i'm currently building feed hive a sas product that was made for content creators who care about growing an audience and being present online if you're familiar with tools such as buffer and hootsuite then you probably already know how to use feed hive in fact feedhype doesn't really solve anything that haven't been solved before it simply just adds a new couple of twists to it at its core feed hive is a social media management tool it's adding to a market that's expected to have a market size of 70.7 billion dollars in 2023 it's a market that's super established let's make that a little foreshadowing of what my points in this video is going to be about when i announced that i was building feed hive a lot of people were asking me why i had chosen to enter a saturated market and frankly i understand that question try to search around on twitter these days and see how many indie makers are creating small tweet schedules of various types most of them have their own unique touch but they all really solve the same general problem so why would you want to inter-market this saturated well first of all let's just get a little bit of terminology straight here there's a difference between a saturated market and an established market a saturated market is a market situation where businesses in the market meet the full demand of the service they provide it means that the current businesses in that market are fighting over the customers and that room for growth is extremely limited it also means that penetrating a saturated market can become a serious challenge an established market on the other hand is a market where materials and services are bought and sold regularly and where prices are set by open competition that's really all that means it's really important to point out that just because a market is established doesn't mean that it's necessarily saturated it's definitely true that entering a saturated market can be challenging and in a lot of cases something that should be avoided on the other hand entering an established market with room for growth can be extremely beneficial you know the market is there there's a ton of research done already that you can dig into you already know that there's a problem out there that needs a solution and as long as the demand for the solution keeps increasing or the market is big enough to find a niche within it there's most likely going to be room for yet another product take a look at the market for productivity tools you almost see a new tool for managing your tasks roll out every week is that market saturated well i understand why you would believe that it's not but the market is huge and there's a lot of different users with different specific needs and preferences we often hear about successful products that created new market spaces uber airbnb segment and so on and for sure creating a market or expanding your business into a new market can be a highly effective growth strategy but it can also be very risky with very little research and market data available it can be seriously difficult to hit it right so in the situation described at the beginning of this video let's say that instead of you finding a bunch of products that are already solving the problem you just discovered you see nothing no products are currently out there you clearly found something new here so is that a good sign well it can be you may be onto something it can also be a huge warning sign you may think that it's because no one else thought about this before but it's very likely that there's simply just not a market out there for the problem you're trying to solve as they say there may be a gap in the market but is there a market in the gap in fact i tried this myself a year ago i rolled out my first serious sas product sigmatic i thought i had a great idea and the competition was very small bordering into non-existing i wanted to make a platform that would monitor the health of software teams by looking at data from github and converting that into quantifiable actionable metrics that product managers could use to monitor their team's performance and could be displayed as a dashboard to keep the team spirit up and encourage healthy competition i have a background in sales and we use tools like this all the time to monitor how well we performed i thought the idea was great but as it turns out developer teams aren't sales teams it's a completely different kind of culture and not a lot of developers get motivated by having a dashboard showing how many code reviews they did last week i did an honest attempt but my product did not perform well at all i ended up doing what so many startups do trying to solve a problem that no one has so next time you get a great idea and you google it and find a lot of existing products just wait a little before you get all bummed out it's actually not that bad at all but how can you tell if a market is well established or truly saturated well most often a couple of google searches can help you out in general you want to look at the size of the market thus looking at whether the market is growing or not if the market is big and it's actively growing it's almost certain that there's room for new suppliers on the contrary if you notice that a market is concentrated among only three or four major suppliers has slow to moderate growth and a recent history of mergers and acquisitions you may be looking into a market that's saturated let's take a look at the market for social media management tools again according to research the global market for social media management software is expected to grow from 9.2 billion dollars in 2018 to 17.7 billion dollars by 2023 at a compound annual growth rate or cagr at 14.1 percent during the forecast period in other words due to massive adaption of social media there are very attractive opportunities in this market and the demand seems to be actively growing that also means that there are plenty of room for another supplier in fact if feed hive can take just 0.5 of that market by 2023 it will become a business with close to a 10 million dollar yearly revenue so that's why i'm not the least bit worried when people ask me why i entered a saturated market because first of all it's not saturated at all secondly feed hive already has a lot more success than my other sas products simply because of the fact that i chose to solve a problem i knew for a fact that people had it made a world of difference so next time you get a great idea and it seems to already have been done by another provider take that as a very good sign in fact instead of just googling to see if there are other competitors out there start making some actual market research instead get a glimpse of the bigger picture if you can create a solid solution to a problem that you know exists there's a great chance that there will be users out there who prefer exactly the way you chose to build the solution who prefer it exactly your way and in an established market users are more than willing to pay for preference and if the market is big enough that small amount of users may be more than enough to run a sustainable business so don't be scared of established markets if you have a great idea and you know the market is out there just go for it give it your best shot i hope you enjoyed watching this video and i hope you got a bit more inspired to actually pursue that great startup idea you had keep an eye on my channel because i'm sharing tips on business sas products and tech regularly if you didn't already please give this video a like and remember to subscribe for more i will see you soon [Music] you

Channel: Simon Høiberg

Views: 6,389

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Id: BlxmyHI1V8o

Length: 9min 7sec (547 seconds)

Published: Mon Mar 22 2021