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When is a market too crowded?


#1

Hey all, I’m going back and forth on whether a market (in the pet industry) I’m considering is too crowded.

Positive Signals

  • I’ve been reviewing the existing products and customer service seems like an issue for many of the players in the space. I think I could effectively compete with a free, high-quality customer support model.

  • I’ve cold-emailed several potential users and none of them seem particularly happy with their choices. One person told me to reach out when I had a product and they may be up for switching.

  • Many of the big players have LOTS of features. It seems like I could differentiate by maybe targeting smaller customers that don’t need as many bells and whistles.

Negative Signals

  • At least 7 -8 listed on Capterra with pretty high reviews.
  • A lot of the players have lots of features, which means there could be a market expectation for those features for any new provider.
  • I can’t point to any must-have feature that all of the existing providers are missing that I could swoop in with.

What do you think? If more details would help, then I can throw those in.


#2

I think this is a mistake.

"A lot of software developers are seduced by the old “80/20” rule. It seems to make a lot of sense: 80% of the people use 20% of the features. So you convince yourself that you only need to implement 20% of the features, and you can still sell 80% as many copies. "


#3

I hadn’t read that one. Thanks!

So maybe it’s safe to assume I’d need to spend more time building the initial feature set.

Right now I’m just in research mode (emailing customers, visiting kennels), so maybe I’ll be able to find some glaring holes in existing systems.


#4

I think I could effectively compete with a free, high-quality customer support model.

This strikes me as a bit unsustainable. I’d have a look if the competition just can’t afford customer service.


#5

How do products get so many reviews on sites like this by the way? Do they ask users in news emails?


#6

I didn’t phrase this well.

Competitors have a mix of:

  • Customer support built into subscription

  • Customer support as an additional feature (i.e. upcharge)

The upcharge model really seems to annoy some of the existing users, but that’s probably just the name of the game since a lot of those customers are paying fixed installation costs for desktop versions of the software.

In other cases, the customer support is there, it’s just low-quality. So what I was poorly trying to communicate was maybe yet another subscription model with customer support baked in would help form the basis for a competitive advantage. It wouldn’t be a reliable differentiator on its own, but maybe when coupled with other components it’d contribute well to an overall strategy.


#7

Great question. I actually don’t know. I was assuming that very polarized customers sought out review sites like this to talk about their experiences, but I don’t know if that’s true.


#8

Yes. We have about 30 reviews on Capterra and we just email clients and ask them to leave a review.


#9

Awesome, I’ll try it too. Any other sites to consider?

We have some traffic from AlternativeTo.net but they prohibit asking for upvotes. :frowning: Still many apps have hundreds of votes there and it’s hard to say if they are organic…


#10

Capterra is the only one I have found to provide much value. You probably need to look at each site and see how it ranks for search results. For example, Capterra is consistently in the top 2-3 when searching for “salon software” which is the most common term in my industry.


#11

When 1-2 companies are taking the lions share of the market, unless of course you are going to disrupt the market.
I agree you can potentially carve out a niche and focus on a subset of the market, similiar to AWS vs digital ocean.


#12

I’ve read that and Joel has a point.

However, I often see (even in my own software) features that NOBODY uses. And certainly, no one chooses us because of those. And they are equally as many solutions that thrived because they were simpler than existing bloatware. I’d argue Trello’s simplicity is a Feature not a negative.

I HIGHLY recommend the book What Customers Want.
It’s REALLY easy to think you know what your customer want, even if you talk to them extensively. For example they say “easy to use”. What EXACTLY does that mean?

If I’d asked what they wanted, they’d have said “A Faster Horse” - Henry Ford

Customers don’t know what SOLUTION they need (until they see it) but they DO understand their problem. And they’d rather talk to you about THEIR problem than YOUR solution.

**Talks to customers. Lots of customers. And ask the right questions. And find some way to assess what the value will be to them. “How much are they spending on the current solution”, etc.


#13

Thansk for the recommendation. I’ll check it out.


#14

BTW, in the first year or so, good support will help YOU understand them much better. You couldn’t afford the number of focus groups you’d need to get that info.

S