Is brand building enough to win in established markets?
In my last business, I tried to be super esoteric and build a moat by being in a little niche in private equity real estate... long story short, while we did well and were early to the space, we still ended up in a crowded marketplace.
Now that I'm thinking about my next business I'm thinking about focusing more on building a brand around my ideal avatar and recreating some of the products they already use with incremental improvements.
My question is, if my goal is $50k MRR ish as a solo founder, will I be able to sell software on the basis of brand building and better design as my core differentiators? Or am I missing some ingredients?
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Probably not. Branding is extremely useful. But in your specific situation (solo founder, probably low resources, probably a bunch of direct/indirect competitors) might not be enough -- depends on the market situation.
Most important question to best play is probably how big is your market? What per cent of the market that 50K MRR actually is?
That's a good question. I'm thinking about creating a few simple micro products (products that are considered features in bigger tools) - all of which are really broad with large userbases. I'm not much of a TAM researcher, but I do know at least one of my direct competitors is making 60k/mo with a small team after a few years and they're an up and comer to several much larger incumbants.
Long story short - the money is very definitely there in the market - a couple companies exist doing 100-150M in ARR.
Regarding the aspiration part, I don't know. But you are looking at acquiring a 50K MRR part of that (from what I understand it is at least) 25M+ MRR market. So, let's say 1-3% of total pie.
At that level branding (with a very fierce positioning) can help. But, still not enough. You have to generate some kind of additional USP and target an extreme niche part of the market in which you can build barriers to entry (for your direct and indirect competitors).
But practically when you are playing against that big players, the name of the game is focus with extreme friction creating circumstances for other players. How you achieve that kind of friction/barriers to entry for your "walled garden" depends on the niche -- it might be white glove service, extremely focused product, amazing level of support, or a sense of community are good examples.
What a thoughtful reply.
Thank you for taking the time to think and respond to this.
As for differentiation, I think that may be a work in progress to discover, but my core belief is that there are a lot of products that are far too complex and require you to pay for far too many unnecessary features.
I think my differentiation would be ruthless simplicity and the creation of single purpose products for very small teams.
In the industries I’m looking at everybody that has a modicum of success goes directly upstream, gets funding, scales development, And ends up with feature bloat and subpar user experiences, etc.
Since I would be building it as a solo founder I would explicitly avoid taking funding and as a result have a lower price point and be more focused on teams of one to five.
I am glad you feel that way.
That might work. But as you said, you need to focus on discovery for a bit. Mainly because (a) a user's "core" features might be different than another's, therefore it might be hard to develop something that's both minimalist but valuable and; (b) "minimal" may or may not be a dimension users assess a tool in your market.
Only way forward is through customer research, I think.
I doubt if that's a correct way to see it. An established brand can bring some value definitely though but you can't just rely on the brand simply. It would still need considerable hard work but yes a brand can give some easy pus.
Branding is mandatory; no debate about that.
I don't think it's enough to be successful though. If your brand is great, you get people to try your software.
Then your task is to keep them as paying clients.
I have no idea, but I am very interested in the answer to that question, because I am in a similar situation. Thank you.
No, even well recognised brand have to work constantly to be relevant in the market. Example: Apple
People don't want "better", they want "different".
The main body of Dustsilver company is to make animation peripheral products, and the combination of interesting designing and animation elements is our passion.In this process, the boss came up with the idea of designing a better mechanical keyboard of his own because of the boring design of other keyboards. In 2020, we have taken action for this and have a very experienced keyboard design and production team.
https://dustsilver.com/collections/pink-cute-kawaii-hot-swappable-backlit-wireless-mechanical-keyboard