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CHANGES:
New format! Instead of "Next Steps," where I usually talk about viable distribution channels and try to wrap up the opportunity in a nice bow, I've split these into two different sections.
OPPORTUNITIES: Click to learn how opportunity sizing works
1. Level 2 - Indie Hacker: An end-to-end sales & user engagement analytics tool that integrates with the software you already use.
2. Level 3 - Bootstrapper: An AI-based tool for teams that helps support teams offer the best customer experience possible!
3. Level 2 - Indie Hacker: An eCommerce tool to help curation-based subscription boxes manage their procurement process.
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Opportunity 1:
Hubspot Marketing Hub
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Background [1], [2], [3]:
Estimated revenue: $883M ARR
Number of employees: 5,368
Funding raised: $100.5M
Founded: June 9, 2006
Price [4]:
Starting at $890/month for a plan with marketing automation
Opportunity Size:
Level 2 - Indie Hacker
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Hubspot Marketing Hub (which we'll call Hubspot Marketing to avoid repetition) is a software product that helps companies automate and optimize their marketing efforts. [1]
In simple terms, Hubspot Marketing offers features like email automation, social media ads and marketing, and even a landing page builder. They aim to be the comprehensive place for all marketing efforts in regards to your website.
Users of Hubspot love its comprehensive nature, although some smaller customers note that the price can be on the high side. [2]
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As many founders have found out the hard way, creating a successful online business is foundationally about two things: a great product and finding reliable marketing channels.
Hubspot aims to be the only product a company needs for their marketing needs.
Need a drag-and-drop website builder? Check.
Analytics on that website? Check.
Manage Facebook, Google, and LinkedIn ads to bring traffic to the website you built? Check.
Social media automation/scheduling to bring in even more traffic? Check!
Email marketing to turn leads into customers? Check!
SEO content strategy? Check!!
The social and SEO features are only available on their Professional plan, which starts at $890/month, but the point is clear: Hubspot offers a comprehensive platform!
For many businesses, a comprehensive platform like Hubspot's makes a lot of sense. Instead of working with individual software for each of the features above, fighting to integrate them all smoothly, they can use a single solution.
And this core premise of a comprehensive, well-integrated solution is the core of why Hubspot has been so successful.
Hubspot went public in 2014, selling shares at $25 apiece, raising $125 million in capital, and establishing a market cap of nearly $1 billion. [3]
Clearly, this offering has had appeal with both small and large enterprises.
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"Overall: I've worked with Hubspot as an individual, with a large multi-national company and a medium-sized non-profit. I would say that most solopreneurs should probably stick with MailChimp or MailPoet. When you have a good budget for marketing, definitely consider a move to HubSpot. I've also used Pardot by SalesForce and it's very comparable. I believe Hubspot is easier in the beginning than Pardot, while Pardot has better connectivity to outside systems (like SalesForce, of course).
Pros: Hubspot is amazing, with great tools for list building, segmentation and email marketing. The process for building emails is easy and enjoyable and the workflow automation is a breeze. I've used MailChimp and Pardot and Hubspot is very different from either of those. Hubspot is for the company that's ready to up their marketing game to the next level while still being simple enough that your team can be onboarded and working quickly.
Cons: I'm not really a fan of the blog and landing page functionality and i really think you should do those on your own website and then tie them into Hubspot, which is fairly simple to do. Also, when you get into "Deals" and integrating sales and reporting from other systems, the simplicity goes out the window. It can still be done, but it's not as easy as the email marketing functionality. Also, Hubspot has its own language and terminology, so it can be a bit confusing until you get used to it.
Alternatives Considered: Pardot
Reasons for Choosing HubSpot Marketing Hub: In both cases where i was involved in the choice, it primarily came down to budget. The first instance, Pardot wasn't as built out as it is now (that was a few years ago and my memory might be fuzzy) but they are definitely a viable option now."
- Dave G. [4]
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Pardot: $200M ARR [5]
Price: [6]
Between $1,250 to $15,000 per month
Pardot is Salesforce's marketing automation tool. With Pardot, B2B companies can easily create marketing emails and automated email pipelines to turn leads into customers, create interactive forms for data capture, and easily sync this data to Salesforce.
Pardot is a direct competitor to Hubspot Marketing. While Hubspot tends to be the cheaper option, if a company already is working within Salesforce, they often prefer Pardot due to its native integration.
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MailChimp: $700M ARR [7]
Price: [8]
Essentials: From $9.99/month for 500 contacts up to $270/month for 50,000 contacts
Standard: From $14.99/month for 500 contacts up to $540/month for 100,000 contacts
Premium: From $299/month for 10,000 contacts up to $1190/month for 200,000 contacts
MailChimp is one of the most popular email automation tools on the market. With MailChimp, users can easily design email campaigns, design forms and landing pages, and more.
Recently, MailChimp has also released a website builder, making it a much closer competitor to Hubspot than before!
Traditionally, customers who only needed email functionality would use a MailChimp over Hubspot. However, Mailchimp aims to close that gap and make the decision harder for customers looking for a comprehensive solution.
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WordPress: $132M ARR [9]
Price: [10]
Plans between $7-$59/month
For companies that don't build a website using a builder such as Hubspot, WordPress is the most common alternative.
WordPress is the most popular CMS on the market, and WordPress.org is a hosting solution that makes it easy for companies to get a WordPress site up and running.
WordPress comes with thousands of integrations (called plugins), allowing you to easily extend the functionality of a WordPress website to include nearly any feature you can imagine. [11]
WordPress is ideal for companies that want full access to the underlying code of their website while still having the done-for-you functionality through plugins. This customization is appealing to many companies and is a strong reason to choose WordPress.
However, WordPress doesn't have nearly as powerful a marketing solution behind it. Users will have to explore separate software (such as MailChimp) to have a fully functioning marketing suite.
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So, where can a bootstrapper compete in this market?
Obviously, there's a huge problem with trying to compete with Hubspot directly. We can't build a comprehensive platform with the same features as Hubspot, at least not without a large team.
And simply taking a single feature still won't be enough. For example, if we 'only' built an email marketing tool (which is still a huge project!), we'd still need to compete with highly advanced solutions like MailChimp.
Instead, let's look at the core value of Hubspot. Why would a user choose them over cheaper individual tools?
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The core premise of the Hubspot Marketing module is that it offers an easy way to do marketing that easily integrates with the other tools the Hubspot user is already using (Hubspot CRM, CMS, etc.).
However, the key sacrifice of this approach is that the user is forced to use Hubspot's tools if you want to keep the seamless feel of the software. For example, if you prefer MailChimp for email, you'll need to use the limited MailChimp integration, which means that you can only capture a limited number of fields from a user.
Additionally, even if you are okay with the limited integration, you now have two places to check for analytics - Hubspot for your website and MailChimp for your emails.
Hubspot has a vested interest in customers using as many of their products as possible. In fact, their growth strategy is based around it!
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And while a platform-approach works great when a user's needs fit squarely within the platform, it's often the case that companies need to choose software for their custom use-case over time!
For these companies, they have to make the hard choice between a fully-integrated source for intelligent marketing decisions or adopting a platform that they might not otherwise choose.
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Hubspot's strategic direction, as indicated in their public investor relations documents.
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Our solution will be to create software that allows a user to easily integrate the most popular individual marketing tools in the market. We'll make it easy to connect them like puzzle pieces, creating a single hub for end-to-end marketing insights!
By creating that analytics-focused hub, we can enable the seamless integration that Hubspot offers while still allowing users to leverage their favorite tools in each department.
This will strongly appeal to business owners who use a combination of marketing tools - offering them a unified analytics platform while still using their preferred tools.
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An example of what our MVP might look like!
(Too small? Click the picture for a higher resolution)
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One way to build this out would be like so:
- Website Analytics Integration
Since Google Analytics (GA) is such a key part of so many websites, it makes sense to start here.
At its core, Google Analytics is a fantastic free tool with incredible power - but it doesn't have a great UI, and it takes some knowledge to utilize it properly.
Google Analytics will be critical for one of our key features - the funnel visualizer (see mockup above).
This feature aims to offer an end-to-end visualization of how traffic flows for this company. The mockup provides a simple example, but we could make this as powerful as we want, including ways to filter for specific traffic (such as by referrer - where the traffic came from).
Using the Google Analytics API, we can easily track the important information we'll need for our funnel analysis.
Specifically, we'll need to retrieve Events and traffic information using the Reporting API.
Over time, we can add additional website analytics tools, such as Segment and MixPanel. This will allow us to offer a vibrant funnel analysis.
- Email Service Integration
Email is the core tool of internet marketing. Despite social media's prominence, no other platform gives you both the ability to push content to your leads AND ownership of the list.
As such, we'll want to make sure that we are deeply integrating with popular email providers such as MailChimp.
Thankfully, MailChimp provides a powerful API that will allow us to offer reporting data (such as how individual campaigns have translated into conversions throughout the funnel).
And with the combined Google Analytics and MailChimp integration, we can do some fancy analytics work on behalf of our users!
For example, MailChimp uses a feature called Merge Tags to personalize emails. It allows users to customize things like adding the recipient's name to the email at the most basic level. This is how emails are personalized.
We can take advantage of MailChimp's API to add custom Merge Tags to users, which we can automatically leverage in Google Analytics! For example, we could add a "CustomerId" custom Merge Tag which customers could then include at the end of links to their website.
Our GA-integrated solution could then automatically look for these tags as UTM parameters, making it easy to see exactly which users navigated to which pages of the website.
This is just a single example of the power of having all of the marketing analytics in a single place!
- Payment Integration
Finally, we'll need to track payment data to offer users a full end-to-end picture of their marketing funnel.
The obvious choice for this integration is Stripe. Stripe has an extremely robust API, allowing us to identify when a lead has signed up.
Even better, we can use the fact that we are integrated with both GA and MailChimp to understand the customer's exact journey to become a paid user!
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- Short-term Distribution Channels
(Fast ROI, harder to scale)
We'll likely be looking at direct outreach as our number one source for immediate results for this opportunity.
Since founders, small businesses, etc., are relatively easy to reach online, this is a great way to explore this idea further.
There's also the potential to look for pre-sales with this opportunity, which I highly recommend!
The way to go about pre-sales is simple. First, find individuals who agree on the premise of the idea - in this case, that an integrated analytics and marketing dashboard would be valuable to them.
Next, you make a fair offer for some money up-front, in exchange for being able to drive the direction of the product and, in this case, have the tools that they already use be the first ones to be integrated into the product (more on this in a second).
And of course, you always want to offer a 100% refund if the pre-order either decide the product isn't for them, or you decide not to go through with the final product.
The goal here isn't to accumulate cash - it's simply to prove that you have found a product that people are willing to pay for and a way to reach those people!
As I just hinted at, this idea is uniquely suited to pre-sales since we can add to the pre-sale value by building the integrations that our pre-orders need first.
This is a win-win for us. We don't waste time building an integration that isn't being used, and our customers feel like they are getting custom-made software for next to nothing!
- Medium-term Distribution Channels
(Slower results but massive potential to scale)
As you start to grow the product, you won't want to rely on cold outreach forever. There is a great educational angle for this opportunity, meaning that this is a great opportunity to invest in SEO and organic traffic!
What I'd do is look heavily at the kinds of advanced marketing analytics our software provides and create high-quality guides on how users can build those manually. This will be a great way to capture traffic that is already looking for a way to integrate their products better and will allow us to drive awareness of our product.
Of course, I'd pair this with a keyword research tool such as Ahrefs, SEMrush, or CanIRank to find the actual keywords to compete with.
- Long-term Distribution Channels
(Can only be established after the product is built and/or has traction! Highest potential ROI)
There are two great long-term channels to look at with this product: affiliates and referrals.
With affiliate marketing, you'll be able to drive awareness quickly to the product in exchange for a cut of the profit. The easiest way to find affiliates will be to find people who are already promoting the software you are integrating with and reach out directly!
Referrals are a great way to make a sale turn into two or more, and we can take advantage of that, which will help our word-of-mouth and increase the number of backlinks we receive, improving our SEO even further!
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This opportunity is great for a founder who's excited to work on a UX and integration-driven project, specifically someone who is excited at the concept of building out a project iteratively (since we can always benefit from more integrations!)
Also, if you're a founder who loves the idea of validating an idea through pre-sales, the fact that we can offer integration priority to our pre-orders makes this a perfect fit!
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Want the full issue?
Click here to get the premium subscription to Software Ideas and unlock:
- ✔️✔️✔️ 3x the market reports and analysis, every week!
- 📝 Access to the newsletter archive, with over 100 in-depth market reports and opportunities.
- 💡 Access to The Foundation course, an in-progress video series focused on how to validate an idea and get your first $2,000 in MRR.
- 💰 Over $50,000 in discounts for starting your next software company through our partnership with Secret.
- 💖 Many more perks on the way, including a private community exclusively for Software Ideas members!
If you're a founder who is actively looking to start your next software company, click here to sign up for a premium subscription!
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Talk to you next week!
- Kevin Conti
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