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Every week, I find VC-backed or profitable, upmarket companies that bootstrappers can compete with. Here's how it works:
- If a multi-million dollar company exists and has significant revenue, then they have proven demand in that market.
- However, whether it's due to being funded or just needing to massively grow revenue to appease private shareholders, the company has no choice but to go upmarket and sell to massive enterprises.
- I've analyzed downmarket niches where VC-backed companies can't play. If the niche can only support a $1-$10 million ARR company, these organizations turn their back, leaving the opportunity wide-open.
- For each company below, I've listed...
- The name of the company and other basic details
- An analysis of the company and market
- One niche to compete in
- A unique selling-point (USP) that beats the big company in that niche
- A clear vision of how you could build the MVP, and...
- The next steps you should take to get started with the idea
Sound good? Let's get started.
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CHANGES:
- Adding pictures to the Competition section, to help you get a feel for the different competitors out there.
- Changed the "USP" section into two sections: "Pain Points" and "Solution", to make it easier to understand why I chose this niche as the opportunity, and hopefully make it easier to understand the MVP I propose in the following section.
OPPORTUNITIES: Click to learn how opportunity sizing works
Opportunity One: Level 2 - Indie Hacker
Opportunity Two: Level 2 - Indie Hacker
Opportunity Three: Level 3 - Bootstrapper
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"So many features that it can be difficult to get your head around it unless you use it every day. Need to be trained on analysis and supporting Line Managers in using and interpreting the data as it can be confusing with so much data."
- Mairead C. [1]
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Background [2], [3]:
Estimated revenue: $17M
Number of employees: 180
Funding raised: $68M
Founded: Dec 19, 2014
Price [4]:
Pricing begins at $5,000 per year
Opportunity Size:
Level 2 - Indie Hacker
This is an opportunity that is of moderate ambition, relying on a minimum market size to drive out bigger competition.
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Peakon is an employee feedback company that focuses on frequent micro-surveys, called "pulse surveys", and machine learning to collect and analyze employee feedback. As an enterprise-focused company, Peakon specifically emphasizes its ability to deal with complex company hierarchies and tens of thousands of employees, all in a way that's easy for employees to use [5].
Customers love Peakon for its ability to manage large teams and to uncover morale issues [6].
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Peakon launched back in 2014 (with official public launch in 2016) focusing on using data to drive employee engagement and retention [7]. With the market at an estimated $1 billion dollars in 2018, Peakon raised an addition $33M to focus on global expansion [8].
Peakon's platform focuses on feedback surveys for employees, insights for managers, and a shared database to help understand how your data compares to others in various industries [9].
Peakon's most commonly cited differentiation is it's "real-time", frequent surveying of employees, which allows for an understanding of employee engagement per week instead of per year [10]. This allows Peakon to quickly tell when an employee may be looking to leave their job - at times up to 250 days before they do so.
As mentioned above, one of Peakon's unique advantages is the database they have been able to build over time is their collection of the entire world workforce's engagement data, which allows them to build reports such as their analysis of the Gen Z workforce. This report was generated off of more than 11 million employee comments [11].
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Price: Starting at $5/user/month [13]
TINYpulse focuses on pulse surveys to manage company turnover and employee engagement. Customers enjoy the platform, but there are some complaints about the UI and the default questions being too lighthearted or not useful [14].
Glint: $100M ARR [15]
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Price: $25,000 to $125,000 per year [16]
Glint is a company focused on medium-to-large business, typically in the range of 100 employees and up [17]. Glint focuses on offering a polished but more traditional employee engagement experience, although it certainly is capable of pulse-surveys and other, more powerful, employee engagement tools.One frequent complaint of Glint software is the high price.
Clarity Wave:
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Price: $4/user/month [18]
Clarity Wave is a company focused more exclusively on small businesses, typically in the 30-500 employee range. Clarity Wave aims to be a comprehensive solution for weekly surveys, feedback and recognition, a daily "mood" survey, as well as rewards and incentive system [19].
Small teams in particular note that they benefit from personal (but anonymous) feedback to leadership, and an increased focus and importance on employee culture and engagement [20].
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Opportunity 2:
Performance Culture
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"We have been using Performance Culture for about 6 months now and in that short amount of time we can already see the benefits of the Check Ins and Performance Reviews. The Check In process has helped us to consistently communicate with our employees (especially our remote employees), appreciate their efforts and track their goals. Our Reviews have become more meaningful as we are able to provide more specific coaching and understand where we are excelling or falling flat. The platform is user friendly and the staff have been very helpful, knowledgeable and extremely accessible during the entire implementation process. We highly recommend Performance Culture to any growing business or company that values their culture."
- Anne-Marie M [1]
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Background [2], [3]:
Estimated revenue: $21M
Number of employees: 130
Funding raised: $12.5M
Founded: May 25, 2012
Price [4]:
$4 to $6 per employee
Opportunity Size:
Level 2 - Indie Hacker
This is an opportunity that is of moderate ambition, relying on a minimum market size to drive out bigger competition.
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Performance Culture is a performance review and employee management software the focuses on creating a culture of feedback and improvement. They do this by offering an opinionated, yet customize-able framework for weekly 1-1s and quarterly performance reveiws [5].
Customers love Performance Culture for its simple visualization of employee performance and ease of use for quarterly reviews and weekly check-ins [6].
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For large companies, retaining top-performing talent and grooming high-potential talent is a constant challenge. This core problem has led to a wide variety of markets, including performance management, employee benefits, people analytics, culture management software, and more.
The performance management market in particular focuses on tackling this problem by tracking and identifying high performers, aligning employee career goals to the larger company goal, and systematizing reviews across the company.
Leaders in this space, like Workday HCM (Human Capital Management) aim to capture performance management as part of a single platform, while smaller platforms such as Performance Culture stand out by offering opinionated solutions to the performance management problem [7].
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Price: Custom only, but estimated at $100 to $200 per employee [9]
As mentioned above, Workday is a humongous company (over 10,000 employees!) that focuses on being an all-in-one suite for HR and finance services, including performance management. Workday focuses exclusively on enterprise deals, and their performance review software is likely out of reach for many SMBs, despite it's favorable reviews [10].
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Price: $9/person/month [12]
Lattice aims to be a suite of tools that help companies in two areas: Performance Management and Employee Engagement.
The performance part of Lattice helps managers perform performance reviews, real-time feedback, schedule 1-1s, offer employee recognition, and create employee goals.
Lattice is one of the more expensive offerings in the performance management space, but in exchange offers the most comprehensive suite of tools for SMBs.
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"Pros: Love the booking calendar Creating quotes is so quick and easy
Cons: Need to be able to create packages Need to be able to apply a dolar value discount at the bottom of a quote Need to be a way to globally update the pricing for an entire quote (ex they pick up friday afternoon and return monday, we only want to charge for saturday. You must individually update the pricing for each line on the quote)"
- Cole H. [1]
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Background [2], [3]:
Estimated revenue: $3.2M
Number of employees: 32
Funding raised: $0
Founded: Nov 1, 2014
Price [x]:
$95/month for a plan that includes payments
Opportunity Size:
Level 3 - Bootstrapper
This is a competitive niche that has room for another player with great execution and focus.
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Booqable is the market leader in equipment rental software for small to medium sized businesses (SMBs). They focus on being an all-in-one solution for inventory management, rental status, and payments [x].
Customers love Booqable for its intuitive interface and support for handling in-person and online payments [x].
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Equpment rental software is used in industries such as ski shops, bike and cycling clubs, furniture staging companies, and much more [x].
While many companies are still managing inventory on an Excel spreadsheet, others have shifted to using a cloud-based system to track their rentals.
The rental market is slightly different than the inventory management market. Instead of simply selling available inventory, you instead have inventory that will be returned to you in the future [x].
Due to this, you need to have a constantly up-to-date understanding of where your inventory is, when it needs to be returned by, and when it will be available for purchase again.
In addition, there are additional complexities, depending on the industry. Some inventory is sent out in packages, and prices may need to be changed on the fly [x]. The huge number of markets that a rental software can serve is a large major reason why it's difficult for companies to stand out in this space; any software that serves all the markets becomes difficult to use and feature-bloated.
Despite the competition, the rental management industry has seen steady growth, having surpassed a $40 billion dollar market as of 2014, with 70% of this revenue coming directly from SMBs [x].
This opportunity is quite unique, as existing players in the market are struggling with challenges from COVID-19 at the time of this writing. EZRentOut, for example, is offering no payments for three months [x].
This offers a unique opportunity to build the product while other companies may be struggling to manage costs, reducing their customer support and development pipeline, whereas you can focus on working individually with business owners and offering stellar support in order to win business.
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Price:
$134.97/month for plan with payment gateways [x]
EzRentOut is one of the most popular players in the general rental space, second only to Booqable. Although it has a somewhat dated UI, EzRentOut is loved by clients for its general function - ability to track assets (inventory) and time-saving capabilities [x].
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Price [x]:
4.9%, plus an additional fee, based on plan:
Lite: 4.9% + 0.50€ per transaction
Core: 2.5% + 0.35€ per transaction.
Rentle, a newcomer in the industry, has received about $400,000 in venture funding to tackle this industry. They are still very much in the early stages, and focus on enabling online sales for their clients with a drag-and-drop online store system. They also focus on their reporting capabilities to improve analytics for rental companies [x].
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I'm deciding on how to improve the free version of this newsletter.
If you have an idea of how this could be improved (without just giving away the premium newsletter for free), I'd love to hear your thoughts!
Kevin Conti
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