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Software Ideas Newsletter

ISSUE #46
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OPPORTUNITIES: Click to learn how opportunity sizing works

1. Level 1 - Micro-SaaS: An omnichannel customer support and social listening software positioned towards very small companies and solo-founders.

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2. Level 2 - Indie Hacker: A no-code UI builder for back-end developers. 

3. Level 2 - Indie Hacker: An AI-based search algorithm that helps users explore SharePoint intranet sites.

Opportunity 1:
MessageBird

Background [1], [2], [3]:
Estimated revenue: $300M ARR
Number of employees: 372
Funding raised: $1.1 Billion
Founded: January 1, 2011

Price [4]:
Startup: Free for up to 50 contacts/month
Pro: $50/month for 500 contacts/month
Pro Plus: $150/month for Pro plan plus coaching
Custom plans available

Opportunity Size:
Level 1 - Micro-SaaS

Summary:

MessageBird is an omnichannel communications platform made to handle communications through any medium at any scale.

In simple terms, MessageBird makes it easy for companies to automate and manage communications over email, SMS, voice, WhatsApp, and more. [5]

Users of MessageBird love the omnichannel features the company provides, particularly the deliverability and speed of the service outside of the US. [6]

Market Background:

Omnichannel Software is all about managing customer support and sales wherever the customer is.

Traditionally, support was simple. You had a phone number and an email address, and customers knew that they could reach you during business hours on the phone or after hours via email.

However, that's not the case today.

With the popularity of social media such as Twitter, Facebook, and messaging solutions like WhatsApp, companies need to be constantly aware of all the activity across these tools.

With texting becoming so popular, companies even need to be prepared to answer SMS messages!

To help handle these demands, omnichannel software began to be created.

Companies use MessageBird specifically for their omnichannel needs for a few reasons. For one, the company has been quite dominant in the European market since the company is headquartered in the EU. [7]

Additionally, MessageBird offers a very comprehensive product. They offer complete software plans, giving companies access to their inbox tool and their automation builder called Flow Builder. 

But they also offer their expansive architecture as an API, allowing companies to leverage MessageBird in their own applications. 

Using the API, companies can send SMS messages, perform voice calls, and even purchase phone numbers!

This allows MessageBird to be used directly within the software, making it a direct competitor to solutions like Twilio (which we'll look at shortly!)

Overall, MessageBird has made a huge dent in the market, with over 40% of all commercial emails being fulfilled through their platform. [8]

Customer Sentiment:

"Overall: I am very impressed, when researching a good solution for my client and looking for reviews, some suggested Messagebird had bad customer support, however, my experience has been the opposite. The y have been sensational with their support in all cases. We had trouble getting our Facebook business verified and their customer support went out of their way to try and help. Just generally very impressed.

Pros: It offers more integrative channels than any other I have seen. The inbox feature for conversations is great and to be able to add non-customer visible notes mid chat stream is a great feature. They seem to e a progressive company and not stale in their feature developments. API in my opinion seems pretty solid

Cons: Not much really apart from a few improvables in the UI, but they seem to be progressive.

Reasons for Choosing MessageBird: Just stood out for many reasons.

Reasons for Switching to MessageBird: More options available in regards to messaging channels and offers more in features for customer conversations in UI."


- Gary L. [9]

Competitor Analysis:

Twilio: $1.8 Billion ARR [10]
 
Price: [11]
Twilio has way too many pricing plans to discuss here! Click the link for the different prices for each API, service, etc.

If you're familiar with a company that provides SMS and phone services, Twilio is probably the one.

Like MessageBird, Twilio offers API services for SMS, Voice, and Email. Additionally, they've recently entered the video market and now offer a platform for real-time HD video. [12]

On top of this, Twilio offers applications that leverage their APIs. They offer an email marketing software called Marketing Campaigns and a contact center solution called Twilio Flex.

Recently, Twilio launched a beta of a product called Twilio Frontline, a React Native mobile application for frontline workers who need to communicate with clients. [13]

Twilio is a public company that has traditionally been focused on enabling developers via APIs and is quickly moving to the product space to grab the enterprise market. In comparison, MessageBird has traditionally been focused on the enterprise market but is quickly making moves to appeal to more developers. [14]

In other words, these two are direct competitors, and we'll likely see even more fierce competition for the two soon.
Avochato: $1.5M ARR [15]
 
Price: [16]
Lite: $92/month for four users and phone numbers.
Standard: $252/month for six users, bonus features, and integrations
Premium: Custom quote for API access and advanced Salesforce functionality.


Avochato is an omnichannel solution that focuses on two particular channels: live chat and SMS.

Using Avochato, customers can text businesses directly or reach them via live chat on their website.

Avochato doesn't offer as many channels as solutions like Twilio and MessageBird do, focusing on providing a done-for-you solution that appeals to small-to-medium businesses instead.
Front: $10M ARR [17]
 
Price: [18]
Starter: $19/user/month for email and most integrations, up to 10 user accounts
Prime: $49/user/month for more analytics and reporting features, up to 50 user accounts
Enterprise $99/user/month for single sign-on and dedicated account rep


Front is a shared inbox tool that aims to make customer support easier to manage across multiple teammates.

With features like a shared inbox, private comments that the client can't see, and integrations with all of the major communication channels, Front is fantastic for a team that is struggling to coordinate.

For companies that are looking for an easy way to manage the incoming customer support requests across any channel, Front is arguable an easier and more intuitive software than MessageBird's Inbox software.

Down-market Opportunity:

As customers' expectations are increasing, so too are the number of tools that help companies handle those expectations.

From just the small list of competitors we've looked at, we can see that omnichannel functionality is becoming common for a number of different use cases.

The largest companies are solutions like Twilio and MessageBird, which offer APIs to enable developers to build these tools as well as product offerings that strongly appeal to the enterprise market.

Slightly down-market, we find tools like Avochato and Front, which offer omnichannel solutions that appeal to companies based on their respective needs. 

Avochato appeals mostly to companies looking for a chat solution and want to support direct SMS, whereas Front is focused on helping teams grow over time through a shared inbox solution.

So, where is there an opportunity for a small bootstrapper looking to make a small, micro-SaaS product?

When looking at micro-SaaS, it's often critical to find a niche that larger players aren't interested in. Otherwise, the competition's larger feature-set will become a competitive challenge.

As such, we'll look down-market for this opportunity in order to build an omnichannel solution specifically targeted at small, bootstrapped companies where a single individual is handling customer questions, social media management, and even marketing.

Pain Points:

We've talked a lot about how the expectation of consumers has changed. It's no longer enough to have only an email address for the company - today, companies are expected to respond to customers anywhere.

However, for tiny companies of one to five employees, this is even more challenging than for larger ones.

For example, a company that is just starting with a single founder will need to be on top of every social media channel, the live chat widget on their website, and of course, email. 

That's a lot to manage!

Since these companies are small, there's less need for complex rule-based automation or shared inboxes for multiple teammates - they just need a solid way to see, manage, and respond to these users across all of these channels!

On top of managing customer questions and responses, these solo-founders are also responsible for marketing and building brand awareness for their product. 

Too often, these founders don't have time to scour the internet to find the relevant conversations that they should be taking place in, resulting in lost opportunities.

Solution:

To help founders with this pain, we'll create a solution that makes it easy to track every conversation around a business. 

By creating a solution with both omnichannel management and social listening features, we'll be able to be a founder's ears on the internet - not only helping them keep track of incoming customer questions and requests from a single source but also allowing them to engage with potential customers!

By combining omnichannel customer support and outbound marketing/engagement, we'll be able to stand out in a crowded field.

Most competitors aren't positioned around these features, focusing instead on their powerful collaboration features and their ability to scale. This makes sense, as they are mostly focused on the general market.

However, for the solo-founder looking for a single tool for managing their inbound & outbound communications, we'll be able to stand out as a highly competitive solution!

MVP:

  1. Gmail Integration

    While omnichannel software is all about connecting to communication channels besides email, it'd be a mistake to ignore this channel.

    However, to keep this product small enough to be a micro-SaaS, we can't rely on building an email client. As the CEO of Front discusses in this article, building an email client is no small feat!

    As such, we'll want to create our product as either a Gmail addon or chrome extension for our MVP. Once the product has a solid user base, we can consider taking the time to build our own dedicated desktop solution.

    Of course, the downside to either of these two approaches is that we'll be limiting our potential users to those that are leveraging Gmail as their email provider. 
     
  2. Social Media integration

    Next, we'll want to build basic integrations with the most common social media platforms. 

    At first, we'll likely want to integrate with the Twitter API to add DMs and mentions directly to the user's inbox and allow them to respond directly from their Gmail inbox.

    We can also easily integrate with Facebook Messenger through their API.

    Beyond these two integrations, it makes the most sense to build future integrations based on user demand. This also creates a great incentive for early users if you give them a hand in deciding which integrations come next, something we'll talk about more below!
     
  3. Social Listening

    Our core differentiator compared to a shared inbox tool like Front is our social listening features, which will make it easy for users to not only handle incoming customer concerns but also to engage with potential clients online!

    We'll start with Twitter, leveraging their Search API in order to allow users to easily search for keywords and obtaining a semi-live feed when those keywords show up in a tweet.
     
  4. Bonus: More integrations

    This type of product will always be adding integrations - the ones listed above are only a starting point. Over time, we'll want to integrate with popular live-chat providers such as Drift and additional social media options!

Distribution Channels:

  • Short-Term Distribution Channels:
    (Channels that offer immediate ROI, but can be challenging to scale)

    Since we're targeting small companies and solo-founders with our niche tool, you'll want to engage on a personal level with these founders.

    One of the best ways to do this is to leverage social media by building in public!

    Building in public is a fantastic strategy since you'll be able to start growing interest in the project while you're still building it while also sharing valuable content that other founders legitimately enjoy hearing about.

    Additionally, this will create a great opportunity for pre-sales. Like we mentioned earlier, since you'll be building integrations iteratively, you can offer your early supporters a direct say in which integrations get built next, creating an incentive to help to join while the product isn't complete.
     
  • Medium-Term Distribution Channels:
    (Usually take a while to get started, but will grow linearly with your business)

    Once the product is built and has a small following, the next avenue I'd focus on is building a strong content marketing play, teaching founders how to leverage customer conversations and social listening to grow a product.

    One interesting way to do this would be to do a case study, by helping a founder with a product you feel is interesting, and working with them to engage and grow their product using your tool. If you have positive results, this will be a great story to share and will likely lead to many more sign-ups!
     
  • Long-Term Distribution Channels
    (Can only be done after the product is established and/or offers exponential growth)

    Once the product is established, there are several opportunities for strategic partnerships that you can implement.

    The founder market has a great affiliate market, and I would work hard at finding high-quality affiliates who can complement your own reach to drive even more leads to your website.

    Additionally, a referral program tends to be well-received in this market. Since founders are already sharing the tools that are working best for them, they usually consider it a win-win if they can get a discount on the software they already use for recommending it to others!

    Lastly, I would look at partnering with deal-based websites such as Secret and AppSumo, helping drive awareness of the product to a massive audience!

Conclusion:

By creating a combined social listening and omnichannel support product, we can make a tool that small companies and solo founders love for managing their inbound customer support and outbound marketing, all from one place.

If you're looking to serve founders and entrepreneurs, this opportunity will be a great fit for you. Additionally, if you're excited by the idea of building a Chrome extension instead of a stand-alone web app, this opportunity is a great place to explore that!

The fact that this product is so integration-focused is a double-edged sword. One on hand, it allows you to build the product iteratively, growing slowly from a micro-SaaS to a complete product that competes directly with solutions like Front. 

However, this also means that you need to be very comfortable working with APIs of other companies, meaning that this isn't an ideal opportunity for a non-technical founder looking to minimize the amount of code they need to write.

Overall, this is a great opportunity for a founder who is looking for a micro-SaaS with a strong founder/market fit, a combination that is quite hard to find!

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!

Thanks for Reading!

Talk to you next week!

- Kevin Conti
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