Last week I had an idea for a new startup to help businesses with their recruitment process. So far my research into the idea has gone a little like this:
At this point I was very positive as:
However my research then continued and I discovered that there are already some websites very similar to the type of solution I had in mind. One in particular is, on the face of it, pretty much exactly the kind of site I would like to build.
What I'm now trying to decide is whether at this point I should move onto the next idea or instead progress this one, with the following in mind.
Any thoughts greatly appreciated :)
There is no right or wrong answers to your questions.
If it is a big market and no dominant market leader (> 80% market share), you often can carve out reasonable niche by position yourself differently. Example: FogBugz.
To decide whether you should move onto the next idea or not, it comes back to you on what kind of businesses you want to build. Personally, been through the process, here's a list of questions I asked myself now every time I am evaluating new idea.
It surprises me how much ideas I threw away after I run through that questions.
Hope that helps.
Great questions to be asking! First, I'll deal with the last point made, because it's the most straightforward. When starting a company, any company, it's safe to assume that competition will exist sooner or later. So you need to figure out what would set you apart.
What you should try to figure out is what would set you apart, and what you personally could bring to the table that would not be easy to replicate. For example, if you needed to build some complex software to make your idea work, and that would not be exposed to the client, then you could have a distinct advantage over your competition (potentially).
Trying to buy your way into the market by undercutting CAN work, but it may not be a good long term solution. You still have to be competitive, and provide a better service, or product, or feature set than your competition. I would not recommend this route, unless you're trying to buy a competitor's entire business.
Base your decision on how well you know this customer base and the problem you're trying to solve, because it is going to change and you better be ready. You can only copy the competition for so long.
Cutting cost may not prove to be profitable. You don't want to find that you're not making any money and then have to raise rates too soon. Your competition may have deeper pockets than you.
Keep us posted.
Great set of the right questions to be asking William.