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How does this newsletter work?
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Every week, we identify VC-backed companies that bootstrappers can compete with. Here's how it works:
- If a multi-million dollar, VC-backed company exists and has significant revenue, they have proven demand in the market.
- However, due to being funded, the company has no choice but to go upmarket and sell to big companies.
- I've analyzed downmarket niches where the VC-backed companies can't play.
- For each company below, I've listed...
- The name
- 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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Issue #2 comes with a wide array of changes. Here's the shortlist.
1) More references. If you see a [1] icon after a statement, clicking on it will bring you to the reference.
2) Increased market analysis. I'm going about twice as deep on each business, in order to help build the context around the company and better explain the USP and MVP.
3) A new section called "Next Steps" shows you exactly how to take this opportunity and what you should do next to verify the idea and begin acting on it.
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Opportunity 1:
ReviewTrackers
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"We like ReviewTrackers, but we have also recently started using some other tools that also include review tracking. We plan to evaluate those before renewing our ReviewTrackers contract."
- Chris H. [1]
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Background[2]:
Estimated revenue range: $10M to $50M
Number of employees: 51 to 100
Funding raised: $17.7M
Founded: May 25, 2012
Metrics[2]:
Monthly web traffic: 129,194 visitors
Monthly web traffic growth: 14.91%
Price[3]: Custom quote only, but plans used to begin at $49/month.
Opportunity Size:
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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ReviewTrackers began in 2012 as a VC-backed company focusing on review management and review generation for small and medium businesses.[4]Their customers love them for their powerful consolidation of different review sites and custom reporting alerts.
This product is most frequently used by businesses with multiple locations, such as franchises.
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Review management and review solicitation are life-or-death activities in many service industries, including hotels, restaurants, and residential cleaning.
Services such as ReviewTrackers are essential for businesses in the service industry, and, by extension, agencies that handle online interactions for these companies.
Products in this market tend to have one of two customer audiences:
- Directly targeting the business operator, or...
- Targeting marketing agencies
Be careful when investigating this area, as the two have notably customer bases, features, and prices.
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Competitors targeting agencies include:
- Vendasta: Starting at $345/month, plus a $200 onboarding charge [5]
- Vendasta is one of the largest players in the market, offering an all-inclusive experience (including a paid B2B app store), at the most premium price.
- LegitLocal: $79/month for up to 5 businesses [6]
- LegitLocal competes in both markets, with a notable focus on its mobile app and sms-based review solicitation model (note: this is a trend we'll discuss shortly).
- Shout About Us: $25/month/business [7]
- Shout about us plays the middle of the agency market, positioning as an affordable, well-built option.
Competitors targeting business directly include:
- Vendasta: $49/month [5]
- Vendasta offers a small business plan at $49/month for up to 250 emails/month, which is not extremely generous. After that the plan quickly escalates to $345/month.
- LegitLocal: Free account (solicit 10 reviews/month) then $49/month for more [6]
- NiceJob: $45/month [9]
- NiceJob is a great platform for small businesses who wish to upload to general review sites like Yelp, but struggles with some of the more niche websites. [10]
The self-serve market is comfortable anchored to the $40 - $50 price range, and another product could fit there comfortably.
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This is the classic example of a niche opportunity. The major players in the market reach their size by needing to appeal to all the users in the market.
By specializing your positioning to a particular type of service, you would be able to hyper-focus on a specific group of people, find them easily online, and incorporate niche review sites that only their niche will care about.
Which market you chose should depend on your own personal connections, which niche you would most prefer to serve, etc. However, I'll use a specific niche for the example: Reputation Management for Chiropractors.
(Looking for an example of this strategy in the market? Check out ReviewRight: Reputation Management for Dentists [11])
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Out unique selling point is a simple, traditional niche offer: We are specifically for chiropractic businesses, and we offer review management on niche sites that are specific to the chiropractic industry, as well as the general, more popular ones.
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An MVP could look like the following:
- Offer a consolidated dashboard for monitoring reviews of all the popular review sites (Yelp, AngiesList, etc.), as well as the following niche review sites:
- ratemds.com
- usa-chiropractor.com
- thervo.com/chiropractors
- and more!
Note that we don't need to offer integrations yet (where you can reply directly in the application). That can come later
- (Bonus): Offer review solicitation via SMS. This has become a "must-have" feature due to how much more likely customers are to leave a review if they can do it on the phone.
- a simple implementation: Via SMS, allow the chiropractor to send an automated email that includes a link to review the website on a given platform.
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If you want to pursue this idea, you should investigate the following:
1) How can I reach chiropractors? What channels can I reach them through?
Likely answers include online communities (Reddit and Facebook), cold email, LinkedIn, organizing online webinars, and paid advertising. You should investigate these channels and see if you are able to get traction in any one.
2) Which service are chiropractors already using, and why? How much do they tend to pay?
This allows you to identify any other notable competition, as well as build a roadmap of critical features for beyond the MVP.
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Opportunity 2:
TapInfluence
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"I find the price is a little outrageous for a small agency. The platform has been designed for enterprise level purchasing and re-licensing out to clients - this is really prohibitive when first trying to sell the product to clients as we can't show them results without huge initial investment." [1]
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Background[2]:
Estimated revenue range: $10M to $50M
Number of employees: 51 to 100
Funding raised: $22.7M
Founded: June 1, 2009
Metrics[2]:
Monthly web traffic: 30,624 visitors
Monthly web traffic growth: 14.02%
Price[3]: $10,000/month.
Opportunity Size:
Bootstrapper
This is an opportunity that is of large ambition, best suited for someone willing to commit over multiple years.
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TapInfluence is an Influencer Marketing software, whose main pitch is that it allows you to find and buy influencers for campaigns, all on one proprietary platform.
Customers of TapInfluence love the ease of use for finding influencers, while agencies in particular love the ability to sell it to clients. [4]
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TapInfluence, previously named BlogFrog, began to exist in its modern form in 2013. [5] Their main pitch is that they are able to maintain a list of 100,000 influencers for brands to connect with.
(Click the link to see Rustin Banks, the Co-Founder of TapInfluence, on how the influencer market works, and how TapInfluence operates) [6]
The influencer market is huge, rapidly changing, and growing over time. Click the link to take an in-depth look at the influencer market data from 2016. [7]
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There are a large number of competitors that do not offer a self-serve option for agencies. These agencies are all trying as rapidly as possible to move towards the "Holy Grail" in this industry, which is a product that offers the following:
1. Find influencers
2. Connect with influencers
3. Engage with influencers (unpaid)
4. Recruite influencers for a paid campaign
5. Display reliable metrics / reporting data
(Want to know more about this? Check out the link here: [8] )
"Hopefully one day creating an influencers campaign is as easy as setting a facebook ads campaign." [9]
- Paco T.
The following companies aim to be the all-in-one solution listed above, and have custom-only pricing:
- Upfluence [10]
- CreatorIQ
- TapInfluence
- Influencity
- AspireIQ
- Grin (Focus on D2C and costs $25,000/year) [11]
These companies, on the other hand, offer self-serve plans:
- SocialBook: $199/month [12]
- SocialBook offers a very large database (3 million influencers), and targets specific companies instead of agencies.
- SocialBook focuses exclusively on YouTube, Instagram, and Twitch
- Join Marketing - $99/month [13]
- Join marketing focuses specifically on European influencers and companies, and offers both a brand-based plan and agency-based plan.
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The lower-end of the market is wide open for a white-label "Land and Expand" opportunity at the small agency level.
Land and Expand is a strategy where you launch a small initial offering to a smaller audience, and slowly grow to compete in a bigger niche.
This is a good strategy for when the highest-level of the competition is too stiff to break into, but the lowest-level of competition is quite weak.
A white-label product is a product that your customers can customize the logo and branding (as well as the subdomain it lives on) to appear as though it is software owned by the marketing agency.
It is then resold to the customer at a premium.
By targeting small marketing agencies of 1-5 people who want to add influencer marketing to their services, you can launch a competitor product in the low-end of the market.
From there, slowly expand your product offerring to vertically integrate into all five aspects of the influencer campaign management process.
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The unique selling point is to explain that you are a company that specifically works with small marketing agencies to enable them to run influencer campaigns for clients via white-label software.
Most agency-focused solutions are incredibly expensive, in the range of thousands of dollars per month. Instead, you can offer a more reasonable amount for a small agency, and use that time to grow and expand the project to be able to service larger agencies.
(Note: There is opportunity here to run a service-oriented SaaS model, where you offer up-front training and guidance for as a productized service, with the SaaS fee trailing afterwards).
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The MVP might look something like:
1) A facetable list of influencers (see "Next Steps" on how to acquire this data)
2) White-label: Ability to customize domain, branding, and logo
3) Profile analysis - Investigate if an influencer's following is real and heavily engaged.
Note: This can be done in a more niched way by focusing on one particular medium, such as only YouTube influencers. However, doing this would require you to likely adjust your strategy to target individual brands instead of agencies, which is why this concept hasn't been covered in depth.
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1) Create a list of small marketing agencies, either via LinkedIn or through some other curated list. These should be easy to find, since marketing agencies want companies to be able to get in contact with them.
2) Reach out and offer to interview for a company round-up that you will be publishing to your audience. This allows you to do customer research while still offering something of value.
(You can mention you will publish the article to IndieHackers, which is home to tens of thousands of entrepreneurs who may be interested in such a campaign).
3) Investigate the following questions:
- Do they offer influencer marketing to their clients?
- How do they manage their influencer marketing?
- Are they happy with the software they use?
4) Acquire the data:
The majority of the industry uses a database called Demographics Pro, which offers API access to their information. This is also what TapInfluence uses for thier software (at least, as of 2015.) [14] You could either utilize this data or find a different source for the list and attributes of influencers.
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"It removes any ambiguity about bugs and feature requests. Being able to annotate a comment directly on a live / staging website, is a huge perk and something that I now cannot live without."
- Mark B. [1]
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Background[2]:
Estimated revenue range: $10M to $50M
Number of employees: 11 to 50
Funding raised: $1.5M
Founded: 2011
Metrics[2]:
Monthly web traffic: 138,468 visitors
Monthly web traffic growth: -12.05%
Price[3]: $39-189/month
Opportunity Size:
IndieHacker
This is an opportunity that has limited technical complexity, a clear niche with visible channels, and does not involve incredibly stiff competition, making it a great product for an IndieHacker-type entrepreneur.
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BugHerd is a visual feedback tool for websites. Their tagline is, "It's like using sticky-notes to capture and pin client feedback directly onto a page."
Customers love BugHerd for it's ability to easily get feedback from clients, and some customers are even using it to help generate feedback from QA testing. [4]
BugHerd is unique in this list, as it originally was a VC-backed company, having raised almost one million dollars, before their upmarket play crumbled and they were forced to scrap two projects and repay their investors [5].
As such, this opportunity is not necessarily a downmarket play of a VC-backed company, but an alternative positioning play to a cashflow-positive one.
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The user / site feedback market has been around for a while with a wide diversity of tools available. No single product has been able to dominate the market, which makes it unique when compared to the other markets in this analysis.
Below are the two main competitors:
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- Marker.io: $59 - $199/month
- Marker.io is a company that came about in 2015, and focuses equally on project managers, QA testers, and agency clients for its feedback tool.They are also a VC-backed company, having raised an undisclosed amount in a seed round in 2016, and have not had to take funding since. [6]
- Usersnap: $79 - 149/month
- Usersnap focuses on feedback from users, instead of internal teams. While its customers enjoy the integrations to the platform, there seems to be a lack of flexibility with the automatic ticket that is created. [7]
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There is a strong opportunity for a positioning play here.
A strong focus on the QA niche is a promising opportunity for a competing software. Currently, all of the major projects attempt to appeal to multiple niches, notably agencies. The mix of their positioning prevents them from diving deep into what would make the ideal QA experience.
The QA market itself is already worth over 5 billion dollars, and is still growing rapidly. [8] As more and more companies begin to take a OpEx hit in this category, solutions to improve workflow will naturally improve in value as well.
As such, a fast follower to BugHerd and Marker.io can quickly reach feature parity by focusing only on the features that QA want/need.
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The unique selling-point of this product is simple: You aim to make the manual UI-testing process as efficient as possible. While manual testing is being reduced throughout the industry as a result of increased DevOps practices (such as CI/CD), manual testing remains a large part of the testing process for critical flows.
By positioning this product as a solution for QA teams to more easily return feedback to developers, the market and value-add is clear.
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The basic MVP can look like the following:
1) A javascript snippet that can be inserted into a page, rendering a toolbar. That toolbar will communicate with a service and store the user's feedback, along with a screenshot.
2) An integration with some project management tool, such as Jira, which if enabled will automatically create a ticket in Jira.
There is much more potential here than the MVP. Some additional features include:
- Allowing for video, GIF, or multiple screenshot feedback
- Additional integrations (Intercom, Slack, etc)
- Automatic generation of a QA report for the session (to assist with documentation)
- And much more
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The next steps for this task is to communicate with software development teams, such as agencies, that have QA departments, and validate this angle of approach.
My preferred method to do this is via the "Company Roundup" hack I mentioned in the TapInfluence section above.
Once you are in contact with companies, you'll want to ask these questions:
- Do they do manual testing?
- If so, have they considered one of these tools?
- Do the tools offer the integration they need?
- If not, what is their workflow for recording bugs from QA?
Based on their responses, you'll gain an understanding on the language, pain, and context around this problem. Then, assuming signs look good, you can either pre-sell the product for increased validation, or go straight to building the MVP.
There are likely many channel plays for this product. You can attempt to reach QA directly via inbound marketing, such as content creation and SEO, or you could target agencies directly via an outreach approach. A combination of both will likely be needed in the beginning.
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Want more ideas like these?
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If you'd like to support this project and receive this newsletter each week, you can sign up for your first three months for $57.
You'll also unlock:
- Every previous Issue of the newsletter
- Access to subscriber-only content as it's released (such as our list of 50 B2B App Stores to build in)
- Surprise bonus content on an ongoing basis.
If you're a serious entrepreneur who's looking for their next business opportunity, and wants research-backed ideas to take off from, sign up today!
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