Competition Everywhere.. How To Find Uncrowded Markets?

Discussions
#1

I’ve been through other posts here regarding market research, been through many of the blogs on software entrepreneurship, taken on a lot of the advice and suggestions there, which usually are a flavour of:

  • look at your experience/expertise/communities you’re involved in
  • target narrow customers (niche) – focus on ‘boring’ software as oppose to ‘cool’ software
  • build an audience
  • build small products for that audience
  • leverage, etc, etc,

I taught myself programming about 8 years ago, freelanced for the first 5 years, got a job which I held down for 3 years, quit that a few months ago and have returned to contracting, and now have 30+ hours a week free time to build my own products.

Have been heavy into self-improvement for the last 15 years, I enjoy photography and love motorbikes.

Looking at all of this, it would make sense for me to build products to help the following:

  • Freelancers/Contractors
  • Self-taught programmers
  • Photographers
  • Motorcyclists
  • People heavy into self-improvement

These are all related to crowded markets.

So I decided to branch out a little. I went on Capterra and G2Crowd and some other business software listing websites. I literally went through every category on Capterra to note the number of competing products. Found a few categories which didn’t have that many options – Art Gallery Management Software was one of those categories.

Also found other categories that, though I’d love to enter, seem very over-crowded - Dog Kennel Management Software and gang (pet grooming, catteries, etc). Went through all of the reviews on some of the big players and noted down all the “cons”, which would seem like a great place to start.

…but all of this has me back at square one - perpetually stuck in research mode. Every time I go to build something, talk to potential customers, even if I setup an application, build out the data model, integrate a template for the frontend etc, there is ALWAYS a point where it seems like it just isn’t going to work because the market is too competitive, and yet the competition is what is validating the idea, so obviously it cannot be avoided.

What is the solution? It seems there is a fine balance between adequate research and a “just ship it” mentality.

I’ve considered perhaps looking for a partner who already has the beginnings of something and running with that, because it appears without direction and faced with mountains of opportunity, I just cannot step forward.

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#2

It does validate the idea, but it also can make it unattainable if the cost to enter the market is too high.

I believe the niche is defined more by the local concentration of pain than by industry/subindustry criteria. If you see people scream in frustration but the established players do not pay attention - it may be a niche or an opening into an existing market.

#3

Here’s a concrete idea: write a desktop (Mac or Windows) version of https://github.com/jonas/tig

It has 5.6k starts on GitHub, so interest is there.

People pay for other GUI Git clients.

There’s a clear business model there (have a 30 day trial and charge $39 for the app) and a simple marketing message (it’s exactly like tig, but in a nice GUI).

I’m a simpleton.

I understand tools.

People, and especially programmers, need tools.

Whether it’s to unlock a pdf file, compress a png file better, convert Excel to PDF, manage Dropbox files better than via the simpleton web UI that Dropbox has etc.

There’s almost infinite amount of better tools to write. A better UI for managing GitHub gists. A better UI for managing a GitHub wikis. A tools that allows to quickly publish a blog to GitHub Pages or Netlify, without messing with cmd-line tools. I could go on.

Today I was working on a book https://www.programming-books.io/essential/go/

I understand books too. People need them, just like they need more and better tools.

And yet the ideas I see most often are about helping hairdressers, finding interesting food nearby or collaborating on travel plans. Ideas for people who don’t pay for software (hairdressers), have no business plan (finding nearby food), don’t solve a problem people would pay for (collaborative travel plan) and with no marketing plan (all of them).

Personally I don’t see how starting by watching potential competition (i.e. going via Capterra listings) can get you anywhere.

For business ideas you want insight. Insight comes from understanding a specific problem better than others. Insight comes from experience.

If you worked at 5 art galleries in the past 5 years, then maybe you have an insight about what kind of software art galleries would need and be willing to pay for.

I don’t believe you can get insight by deciding you’ll write Art Gallery software and then spending an hour or two talking to art gallery owners. You don’t know their business, they don’t know software so neither party can connect the dots.

Henry Ford might not have said “If I asked my customers what they want, they would tell me ‘a faster horse’” but there’s a lot of truth to it.

Ford had insight because he was an engineer working on bleeding edge of technology. He spent several years building car prototypes.

My insight for tig comes from the fact that I use git, I know that many other people use git, tig is a good tool that I use and GitHub popularity tells me other people are using it. And from my past writing desktop software, I know it could be done better.

So I don’t have much advice other than: build tools for programmers.

But I am in disbelief that a programmer can go about his work without encountering hundreds of opportunities for making new tools or making a better version of existing tool.

A very simple meta idea: take any popular cmd-line tool (be it grep, ping, htop, find, awk, tig) and write a kick-ass, very polished desktop version.

Many such tools exist (e.g. grep replacement) but there are plenty of new cmd-line tools being created every day that could use a polished re-implementation.

You can SEO it as “GUI for X”, “X for desktop” etc. I’m sure people are already searching for such alternatives.

People are asking even for tig to just be available for Windows (https://github.com/jonas/tig/issues/92) even in its cmd-line form.

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#4

Programmers are bad at paying. They (us) always think they can make better tools themselves.

Enterprises pay for their programmers, yes. But rarely programmers pay for themselves.

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#5

Isn’t that the whole point of customer interviews, and of, potentially, working in an art gallery for a length of time?

That is true… and there are plenty of opportunities to build tools, but the tools I personally use that I pay for are not many - ticketing, time tracking, github, servers, etc, hugely competitive and overcrowded markets.

I do really like this idea. Thanks for pointing me in that direction! Though, as rfctr said, programmers are notoriously difficult to sell to, though perhaps it would be easier to sell to beginner programmers (as such, those more likely to use a gui over console).

#6

Programmers are bad at paying. They (us) always think they can make better tools themselves.

Let’s start with: I was talking about tools more broadly. Yes, at some point I suggested programming tools specifically but I also mentioned examples of tools with wider appeal like a better editor for GitHub wikis.

But as far as “programmers don’t pay”: it’s a myth. Popular myth but a myth none the less.

Programmers are good customers because:

  • they have money
  • they have problems that can be solved with tools
  • the tools help them make money, sometimes directly (Heroku) and sometimes indirectly (a better text editor or better git client that saves time)
  • they use them as part of their job so it’s easy for them to make their employer pay for them

It’s also ironic statement in the context of other ideas people talk about.

Bad at paying compared to whom? A computer-oblivious hairdresser? A restaurant owner running on razor thin margins? A collage student thousands of dollars in debt?

Enterprises pay for their programmers, yes. But rarely programmers pay for themselves.

My definition of “programming tools” includes both kinds and “enterprise” is a very encompassing word.

I certainly won’t tell you to compete with Oracle by building a CRM system and hiring an army of sales people.

But last software startup I worked at paid for a variety of programming tools that can be built by small companies.

Things like Ghost for blogging, server monitoring tools, s3 for storing files, error reporting tools, https://notion.so for company wide note taking, dropbox for file storage, 1password for password management etc.

I wouldn’t call 10 person small business an “enterprise” and yet their willingness to pay $100 month for a tool that is useful in business is just as big as GM’s. Possibly bigger because there’s less bureaucracy to e.g. approve use of Ghost for blogging.

While you might not be able to build a competitor to Amazon’s S3, there are plenty of opportunities to build a better client for S3 (either for browsing files or backing up to S3).

For example http://www.expatsoftware.com/Articles/guy-on-the-beach-with-a-laptop.html build s3stat, a tool that helps build analytics for s3 buckets. He makes a living from that.

Some other guy built a cron-on-the web and makes $6k/mo https://www.indiehackers.com/businesses/cronitor

I’ve collected 57 stories of profitable small businesses (https://blog.kowalczyk.info/article/wjRD/solo-founders-with-profitable-businesses-collected-stories.html) and my conclusion is that tools, both in broader sense and those specifically aimed at programmers, are a rich area for potential businesses.

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#7

Isn’t that the whole point of customer interviews, and of, potentially, working in an art gallery for a length of time?

To expand: I fully support customer interviews. More data is better. I worked at Microsoft and even for technical products like Exchange and SQL Server they had people whose full-time job was to go talk to users of those products and mine them for feedback.

If you do talk to people to validate your idea, you should follow advice from the book “Mom Test” (https://blog.kowalczyk.info/dailynotes/note/b4u674cvj43jdajdsukg-summary-of-the-mom-test-book-about-validating-business-ideas).

That being said, I think it’s safe to say you’re not going to work for an art gallery just to see if there’s unmet software need.

I’m skeptical of the idea that you can look into a business you know nothing about, do hours of investigation and arrive at an insight that eluded everyone else so far.

Finally it’s easy to advise “go talk to art gallery owner”. It’s quite another thing to actually find the gallery, open those doors, intrude in someone else’s busy life, risk that they’ll be brusque with you or treat you like a crazy person.

Some people are good at this, but not many.

That is true… and there are plenty of opportunities to build tools, but the tools I personally use that I pay for are not many - ticketing, time tracking, github, servers, etc, hugely competitive and overcrowded markets

I don’t recommend competing with Amazon or GitHub or eBay. But every large thing opens up possibilities for smaller things that complement it.

Some guy built s3stat which is analytics for s3 buckets.

Some people made good money with tools that help eBay sellers manage their stores.

GitHub has millions of users. Many of them use GitHub’s wiki but their UI is far from good. Build a better wiki editor for GitHub (i.e. build an editor that is to GitHub wiki what Discourse was to phpBB).

Even if you personally are not paying for such tools, I think it’s easier for you to find niches adjacent to tools you do use, with plausible monetization, than to go into field you know absolutely nothing about, like art galleries.

though perhaps it would be easier to sell to beginner programmers (as such, those more likely to use a gui over console.

I don’t believe that at all.

As always there are exceptions but cmd-line tools are mostly bad for everyone.

I’m not a beginner and I would vastly prefer well made GUI tools over trying to remember the exact command line flags for find to only match files and not directories or to be limited by what a terminal allows in terms of UI.

2 concrete examples:

  • a tool like htop could be immediately better if I could have multiple tabs and be able to e.g. drill down the information about specific process in another tab or another window
  • a tool like tig would also benefit from tabs and I can imagine many ways to improve the UI if it was a desktop app. And I can imagine adding even more advanced features

There’s nothing about command-line tools that make them good for advanced users and bad for beginners.

Those are the same people, with the same limits on short term memory, the same difficulty recalling arcane syntax.

Terminal UI is just as limited and awkward regardless of how knowledgable the person in front of it.

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#8

I agree with kjk regarding the UI for command tools, this is something to try.
Just don’t expect that your first tool will bring enough. It is just not that straightforward to estimate the real demand in the next years, there are some other risks. For example, the next big, cool, shiny and highly advertised (!) NEXT-GIT competitor can make your GIT-GUI obsolete within a year. Programmer tools change much more frequently, you have to account for that.

Here is my point.
To find success while making software alone, you need to be continuosly building new tools and sooner or later there would be some product(s) successful enough to bring you enough money. This is a different path of thinking than just aiming at one great product/market/opportunity.

I can see this with many single developers. How many projects they have tried to build before they got something successful?
Here is a wonderful post from Andy which I was happy to find some time ago:
lessons from failed projects

So to summarize, don’t take the market research too serious. Aim for a smaller problem and try to solve a few such problems.
Even the big companies fail often with their market research.

But you have two advantages even if you fail with your market research:

  • While continously building new smaller tools, you are getting more experienced.
  • You can try smaller projects which all together can accumulate enough money for you.
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#9

Let me avoid the elephant trap of the pros/cons of developer market, and suggest a methodology for defining something you will find worth building, and a couple of ideas based on your interests.

Writing code is hard; building a successful business around a codebase is 10X harder. You as founder need to have enormous passion for the idea to fuel all the work and sacrifices you need to make to be successful. If you just want to make money, become a lawyer.

That said, IMO startups flourish at the expanding edges of an industry/interest, especially where there are new/relatively unknown technologies to be used. When you say your passionate about motorcycles and photography, what’s the intersection of those two areas? GoPro. Are there problems/opportunities for there? Yes.

Here’s an idea you could build a decent self-funded startup around:

A premium software tool that lets you take your GoPro videos, noise cancel, and voice annotate. Market: people selling courses on how to do x on motorcycles to people who want to do x on motorcycles. (the “thoughtleader” market is a huge growth area made possible by the Internet, ever-improving tools).

IMO, finding a problem that enough of the two billion people on the net today will pay you money to solve is the Hardest problem to building a startup. All the rest is implementation and execution.

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#10

Sorry, apparently I wasn’t clear. When I said “developers do not buy for themselves” I did not mean “companies do not buy for developers”. The “employer pay for them” is the example of a company buying for developers.

However, these two ways of buying are so much different in positioning, marketing, buying process and budgets that we just cannot mix them together. The only thing in common in them is the tool - but the whole product targeted at a business is very different from a whole product for a developer.

So while I totally against building tools for developers (unless you can afford to produce free tools), I’m all for building tool for businesses that can be used by developers. Such tools maybe just somewhat harder to market because half of your marketing should lure in the developers, and half should persuade the manager, and you never know who is looking at your page right now.

Comparing to other people who actively use computers but are not good at programming even simplest of scripts. System analysts, QAs, PMs, operations, system administrators, networks folks, release managers, security spooks, backup operators.

Call it a business - it doesn’t change much. Someone else, and not a programmer, should see the value of the tool, so your marketing should have all things ROI and less things about coding. Someone else has to provide funds. Payment method would be a purchase order and not CC. Price should be not too low. Sales cycle could be longer.

s3stat is not a developer tool, it is a tool for operations. That only proves my point :slight_smile:

#11

+100500

Also, you need an access to real-life use of your imaginary scenarios - and ideally ability to insert your draft tool into that use. The early feedback is most valuable, follow it sheepishly if you believe your beta users are a good representation of your target users.

Ideally, not only give the tool to other moto+gopro users, but use it yourself - you’d realize the awkward sides of the newborn tool much faster.

Of course, try not to kill yourself on those damn motorcycles. :smiley:

#12

My Lord, I really have set myself a challenge I’ll be chewing into for the next decade :stuck_out_tongue: Speaking of passion, though this isn’t about a money, it is about values - I must have my freedom, and I will not find my freedom in a job or in contracting. I will only find it through semi-passive income.

Staying true to those values is the only thing that will keep me motivated through the many failures that lie ahead. Passion for the actual product is overrated. I think it is safe to say Mckenzie is not passionate about bingo cards or appointment reminders. I’m not following my passions into dead-end businesses. I’m more than willing to work on the “boring” stuff and focus more so on markets, marketing, business and cashflow.

As a developer, I would love nothing more than to live in a world where I can simply focus on my passion and live a comfortable life. That sadly isn’t the case for many of us, so I’m willing to compromise. Contracting is the closest I’ve come, but it isn’t passive enough.

I appreciate all the feedback above. Some great ideas and some great insight!

I recently looked through different projects on indiehackers. It’s inspiring to see small products even pull in $1k/month, with interviews discussing how they went about it, what they struggled with, what they would have done differently, etc. It puts a realistic spin on things. Many of these even disappointing figures required a lot of push. One of the products was a Shopify marketplace app. Seems like a good way to get started on very small products.

Either way, whatever I build will be something that is already making money. There is no point in building something I cannot determine the need of with 10 minutes of research. I’ll play against those odds once I have a couple of successful projects under my belt. Until then, I’m more than happy focusing on less risky, less cool, less innovative projects.

I do have a few things on my side, though: LOTS of time, no dependants, almost no financial obligations. I’m able to work full-time on my projects, so they will essentially be primary projects (not side projects) from day one. This doesn’t seem like a privilege many other developers have had during their journey into product development. I’m hoping this will help me fail faster and get somewhere faster. But it won’t help squat if I don’t actually ship anything!

#13

I do like the idea of mixing photography and motorbikes. In fact, I’m in Thailand at the minute, and the whole buying/selling used motorbikes is a bit of a nightmare (especially with translation barriers between English and Thai). There is only one marketplace that offers any kind of translation service (motors.co.th), and they’ve expanded into cars.

As a biker and someone who will be going through the pain of this process myself, this seems like a great application to work on. I did make a post in a facebook group for the city I’m in and got a bunch of replies that sparked a discussion (over 40 comments) about the many pitfalls of buying/selling motorbikes in Thailand.

Starting to think this might be something to run with… the ONLY issue I’ve come up with is I imagine I’d have to build quite an amount of traffic to make money from a marketplace, though I’m sure there are a bunch of peripheral services I could offer.

I even went as far as to buy the domain bikernut.com, and was planning to expand with bike tours and all kinds of potential useful features for bikers, but initially it would be to solve some important pain-points in buying/selling and maintaining a motorbike in Thailand.

There is also a massive bike rental market, and most places still use pen and paper (even foreign owned), and I am surrounded by literally an endless amount of these businesses within seconds of walking outside… I probably should be focusing on their problems haha I even missed a month of payments on the motorbike I was renting because their systems are so lax. An automatic sms reminder or even a way to pay digitally or subscribe to payments might be somewhere to start… hmm… lots to think about, but I reckon this makes much more sense considering the opportunity I have by living here.

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#14

He himself said that choosing a niche he had no passion for (appointments) was his big mistake.

Not the best choice - a two-sided market. You’d need to market to both sellers and buyers, and you have one pair of hands.

But who knows, maybe it is a good opportunity if as you said the established player moves to cars and abandons the users.

#15

Yeh, I’m trying to stay away from building a platform because of the obvious traction issues.

What about software to help motorbike rental businesses? There are plenty of those businesses around, and it seems, tech wise in terms of operations, a lot of these places are just coming out of the stone ages. The BIG problem here, however, is the language barrier - but that is also one of the reasons there isn’t much competition.

There are some foreign owned bike rental businesses, but not sure of the scale of them (current place I rent from must only have 8 motorbikes).

#16

No offense but what could we (I mean people on this forum) possibly know about realities of motorbike rentals in Thailand?

If you don’t spend the next few days talking to owners of motorbike rentals that are apparently abundant where you live, then you should not be entertaining writing software for them.

Rarely is the next step to validate an idea so obvious. Your (potential) customers are right there, go and talk to them.

Personally I stay away from ideas like that because I know I would not be able to go and talk with random people about their businesses and how it could be solved with software.

Some people are great at that, some people are the opposite of great.

In this case being able to effectively interview those people is essential skill.

#17

+1

I was trying to imagine a foreigner coming to my birth country and try to establish a business like that… even if all parties are playing nice (fat chance!) I cannot see it goes well.

Maybe a version of the original idea - to have a motocycle site for English-speaking crowds - has legs, but I know nothing about that to guess how to monetize it.

#18

absolutely true, I would encourage development of products for developers. I am developer, ready to pay for a tool which I really need

#19

Apologies… I should have followed up! Agreed, that is a preposterous question to assume anybody here has the first clue of what I should be developing… which kinda puts this whole thread into question.

I intend to speak to the shop where I rent my current bike. I already went away and spoke to business owners on other forums (Thai Visa Forum), and have already read into how smaller bike rental places make their money and scale, and how, for the most part, it is just chump change for those smaller operations (the ones that are largely run by foreigners). So not great.

I’ve done that in the past with some success. Managed to get a few veterinary clinics to agree to have me look over there current software system and how it is managed by the front-desk (before I left the country).

If I’m approaching a business with the belief I have something of value (I do), then I have no qualms about engaging them confidently. If they’re not interested, that’s ok. Plenty more fish.

And yes, interviewing is a skill in itself, and something I’d need to brush up on.

That’s not how business works, though, is it? If somebody comes to you with a genuinely valuable offer to make you more money, who turns that down? If I approach bike rental places and show them a marketplace I built that has 100k visitors every month and I sell xxxx amount of bikes through, do you really think they are going to turn me away because I’m a foreigner? Don’t be silly. They see dollar signs, anyway… only this time they have the opportunity to extract money from me through investment, instead of cash. I’m not at all suggesting I approach Thai businessmen with nothing in hand asking if I can pry into their operations while massacring their language in the process.

As I said, I wouldn’t be focusing on local Thai business owners, anyway. The language barrier, for one, is too steep. For two, as you touched on, there is the outsider effect. But, almost all businesses, including those run my foreigners, have Thai partners, and so I’d be able to get my foot in the door through them… and those foreigners are very approachable. Either way, whether SaaS or platform, I wouldn’t be targeting locals.

Regardless, I’ll have to do more research on the actual numbers involved to see if these foreign-run businesses are bringing in enough money for them to even consider the luxuries of software, unless it can save them a boatload of time/money.

I think that’s where I’m heading next. It’s something I can talk endlessly about and an area in which I can provide relevant, quality content. And I am a developer - I can always scratch my own itches and eat my own dog food.

Appreciate the insight guys. I’ll come back when I have something of actual value to offer this forum.

#20

People who do not trust you because you’re a foreigner? People who prefer to make a quick buck now by scumming the stupid foreigner to an uncertain income in future?