Company Health

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>> It may also be appropriate to look at the company's health in terms of how they're operating. So do they have funding and investment? And how recently have they got investment, and how many rounds of investment have they had if they have that kind of company? Now, the reason that I suggest this is because investors are very demanding.

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And there are a lot of downsides that come with getting venture capital, and a company can very quickly implode if it's taken a lot of investment. And that then opens up an opportunity, right? So I can give you a real example of this. There's a budgeting app that I've used for years called YNAB, You Need a Budget.

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I don't think it's ever taken investment, I might be wrong, but it's certainly not primarily operated like that. And it's been the kind of minor player in the market compared to Mint, right, which I'm sure you've heard of. And Mint was venture capital-based and then imploded suddenly, and YNAB have done an amazing job at basically saying, hey, did you use to use Mint?

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This is how you move across to YNAB, so there was a market opportunity there. So you can look at a kind of competitor and go, well, they've taken a lot of investment. And the last investment they took was quite a long time ago. They must be coming to the end of their runway.

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There might be an opportunity here, right? And then growth metrics, how much are they growing, are they expanding, and particularly what areas are they growing in? So for example, geographic expansion, because, for example, what's the one here? FreshBooks, I don't know whether you've heard it, it's like accounting software.

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Yeah, yeah, it's big over here, right? They've hardly got any footprint in the UK because, in the UK, there's something called FreeAgent, which is basically FreshBooks. Okay, so FreeAgent were able to say, we're focused on the UK market with the UK tax, the UK issues that we have.

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And so they have dominated the market in a geographical area. So you need to pay attention to where competitors are operating, all right?
>> Where do you get this information from?
>> It's not hard to find, in fact. I mean, a lot of the time it's on their website, right?

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If you dig into that About section that nobody ever looks at, you can find it in there. You can also search for them information on places like Crunchbase and it'll tell you whether they've had previous investment. A quick Google of the name of the company and investment, for example, will often tell you what you need to know.

[00:03:18]
So it's not actually as difficult as you think. I mean, you might miss stuff, right, and that's fair enough. We're not trying to be super thorough, we're just trying to get a picture of what's going on. And I know I'm throwing a lot of different things to look at and it might be a bit overwhelming.

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You can go as deeply or otherwise into this, depending on how risk-averse you are. I'm very risk-averse as a person, so I don't wanna waste my time and money, and so I tend to get quite into the weeds of this kind of stuff, right? But you might be like, well, I'm half doing this for fun anyway, so I'm willing to kind of not worry too much about that side of things, and that's okay.

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As long as you're going into it with your eyes open, it's fine. You could be as cavalier or as risk-averse as you wanted. I look at innovation, so I tend to keep an eye on what new features or products they've recently rolled out. A lot of apps have roadmaps on them of what they've done and what they're doing.

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They've also often got newsletters, where you could look through their back catalog and you'll see how often they're releasing new features and how often they're rolling out new stuff. A company that is very slow in rolling out new features or improvements, not just features, often tends to lose customers over time because we like the new and shiny.

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And the other thing is you might find a company that has stretched itself too thinly, a quite small company that started another app and actually, their attention is on the other app, not on this one. Yeah, Mark, go for it.
>> On the other end, I've seen over the 12 years that we've been in business, companies that are constantly launching new thing, new thing, new thing.

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And you're realizing that they're actually running out of steam. They don't have a solid business model, and they often go out of business right after.
>> Yeah, no, that is a fair point, actually. Yeah, I hadn't considered that, I agree.
>> It happens all of the time. And the ones that kind of focus on the core business and seem to just continue to add value to that core thing are the ones that you can see that they actually have a real business and they're succeeding for a decade plus, don't need to change as much because they've really niched down to their market and they're fulfilling it, right?

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>> Yeah, yeah.
>> And so that's the other end I've seen a lot.
>> Listen to Mark. If I'm particularly caught up in this rabbit hole of market research, I'll also pay attention to things like patents and technologies. Are they using any unique piece of technology or they've got a particularly great tech stack that gives them an advantage?

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But it's not really my area of expertise, so I don't normally spend a lot of time on that, but it might be of more interest to you. Talking of technology, there are some things I do pay attention to from a technology side of things. I pay a lot of attention to performance, does their apps run fast?

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Slow apps will drive people mad, and that can be another angle you could get in there. Reliability, is it like Twitter, up and down, as it used to be? No, that's just dating me, that reference, isn't it, really. Twitter hasn't been up and down for years. Security, have they had really any high-profile breaches?

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That can often be a good opportunity to step in. Privacy, what are they doing with customer data? Is that an opportunity to differentiate yourself? So that's kind of how I look at competitors, and I'll spend a little while picking over that stuff and kind of gathering all the information.

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But I mean, then it's really, well, what do you do with all this information once you've got it, really? Cuz it's all well and good collecting it, but if you don't do anything with it, you've wasted your time. So I primarily use it for spotting gaps in the market where I might be able to sneak in.

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So I'm looking for feature gaps, missing features that might include things like integration or data privacy, things that they're not handling particularly well. I look for experience gaps. In other words, their app's UI sucks, or their customer service sucks, or something along those lines. But my favorite of all is audience gaps.

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Is there a niche or a region that the competitor has failed to target? For me, that's the strongest in is when there is something like that. I also, yeah, go for it.
>> So I'm just thinking that you've done all this research and you find out that company X has some feature gaps, experience gaps, and audience gaps.

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>> Yeah.
>> What about just going to them and pitching them your idea?
>> Yeah, absolutely, if that's something that you want to do and the way you wanna go, then by all means do it, that's perfectly valid. It depends on what you wanna get out of this at the end of the day, right?

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If you're after income that's not related to, that you can get a regular income, if you like the idea of running an app, those kinds of things, then maybe you don't wanna do that. But if you wanna, get then on board, and you like the idea of having a big partner and you don't mind sharing ownership over it and those kinds of things, then absolutely, it's an option.

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Yeah, go.
>> Yeah, I think what you're talking about is channel partnerships, and it's a big way that we've grown over the years. So in the early days, we licensed all of our courses to Pluralsight, and Pluralsight was the 100 pound gorilla in the early days. And so that's a channel partnership, taking your product and putting it on a marketplace, or whatever, getting fees back.

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And I think a lot of these apps, they also have channels like plug-ins or something like that. And if you go into the plug-in marketplace and you publish a plug-in there, that's a way that you can get some distribution for your app. And so any time that large products have these kind of marketplaces or plug-ins or whatever, think about how can I somehow leverage the large thing to get some traction?

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Yeah, you're not gonna make as much money doing that, but you're gonna at least get awareness that then you can go off and build a sustainable business in the future.
>> And I think that last part is the key part, because one of the big mistakes that I see people make quite a lot is they build their business on somebody else's business, right?

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And when you do that, you are very vulnerable. So you see it all the time with people who sell via Etsy or they sell via Amazon. Amazon is the worst for it, right? People sell on the Amazon Marketplace cuz it's nice and easy to do. And then, Amazon are tracking all the data and they go, well, this thing sells very well, I'm gonna sell that now.

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And they just decimate other people's businesses in the blink of an eye. Another really common one is people that build their business on somebody else's API. For a long time, well, Twitter was a great example of that. Remember Tweetbot was a far better Twitter client than the Twitter client was and we all used that for a while.

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And then suddenly at some point Twitter said, well, we're changing our API so you can't use it like that and decimated their business again. So spotting gaps is obviously a big part of what we get out of doing market research, but it's not the only thing. I think also market research can help us innovate and move a sector forward and move our own product and service forward as well.

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So we can look at technology, for example, cuz technology is evolving all the time, and a lot of competitors that kind of, understandably, if their existing product's in the marketplace, they're built on legacy technology. They don't get to use the new shiny toys. That's what you get to do, and they might retrofit some of those things in, but that's not the same as building them in from scratch.

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And we can see this at the moment with AI, every product you can possibly imagine is cramming AI into it. But that's very different to building an app that's got AI in from the ground up. So there are opportunities for us to innovate and separate ourselves from the competitors using new technologies.

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Values is another great way of innovating. So it doesn't apply in every situation, but people's values change over time. And so if you're launching an app today, you can tap in more to the values that people have today, rather than those in the past. So great examples are that sustainability is very high on people's agenda these days, as is privacy.

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And so you can build an app with those things baked in from the beginning, okay? And that gives you a story to tell in the market, gives you a competitive advantage. You couldn't build a whole business just around those things, but it's another aspect that you can bring to the table.

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And then also, you can innovate with business models as well. So there are alternative business models that other people within the market might not be using, the Freeman model or flexible pricing. There's lots of different opportunities and, as I said, we'll get into pricing and a lot more later.

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So there are, you can look for gaps in the market, you can look for opportunities to innovate in the market, and you can look for opportunities to optimize in the market. In other words, do it better than the competitors are doing. So you can make it faster, right?

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Can you enable people to achieve more in less time? That's always a big selling point for a lot of people, so you can gain an advantage there. You might just make it better. Can you offer the ability to do more or to a higher standard than the competitors can?

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And the other one is the obvious one, can you make it cheaper? Can you offer the same as competitors but at a lower price point? So there are lots of ways that you can take what you're learning about your competitors and actually apply that to the direction you go with your own app or your own business idea.