Is this a good idea to compete with big players with a side project?
Hey community,
A few years ago I have written down an idea for of specific solution for software houses, but never touched again.
Today a came across a player (with more than 15M in funding) with the exact same solution. They are charging like $300/mo for small teams, which my a startup would not afford to pay.
When I browsed their features, I figured out that I would be able to build most of the features (the most essential ones) in 1 or 2 weeks as a side project. Of course I wouldn't be able to achieve the same quality and features set, but I would only charge less then 10% of them.
Is it a good idea to try to compete by price with such a big player?
I don't see a big gorilla in the room as something bad, but if you will do the same functions - it would be really hard to get customers.
You don't need the same features set, you need your own set. Product is never just a bunch of features, you need to find your own angle and figure out how you can be different.
Look, sometimes a cheap price is exactly what a customer needs.
Here's an example: Everyone must know Intercom. Their core product/feature is a live chat for websites. But the cheapest price costs $136/mo, which is quite expensive for indie makers for example.
While searching for an alternative, I came across crisp.chat, which is free for basic conversation features. And the free plan has everything I need. The most expensive plan cost $95/mo, which is still less than the Intercom's essential.
So my idea is that I can build a MVP of this product with only the core features, then charge 1/10 of the big player and evolve while learning from customers.
I started a new discussion specifically for the price subject.
https://www.indiehackers.com/forum/when-the-price-is-a-good-way-to-stand-you-out-from-your-competitors-9cb4867558
You can be totally right, but it's just my feeling :)
You are making the classic mistake of "I will charge them less, provide the same features and I will eat the big guy's market share". No, that's not how business works. Customers don't just select a product/business only based on Pricing even though pricing is a factor. Ultimately it is about the problem that's being solved for that customer and your ability to demonstrate that your product/company is the best for that customer's needs. Make that case. That's how you can compete with anyone including the big players.
Don't build features. Identify the target market that you want to sell to. So let's say this competitor has a broad target market because they are big. You instead decide to focus on a niche segment of that market. Then find customers in that segment and try to get their attention (reach out, marketing, cold call, meeting etc).
Got it. In my case, I had this problem myself in my IT agency 5 years ago. And I didn't find any solution for that. I still have this problem today, but I found a solution charging me $300/mo. I cannot afford to pay this.
How many startups knew this player and didn't subscribed for the same reason? We will never know.
Yeah, that makes sense.
Thanks for your comment.
Just curious... who is this player?
This is getguru.com, a knowledge base platform for Slack.
As I said, it's a problem I had in my IT outsourcing agency (10 team members) and it's still a problem today. This is the exactly solution I scratched a few years ago.
This may be a good overcoming alternative for the legal situation I'm facing with SlackBucket — please read the latest 2 posts. I could pivot to let users save and organize only important topics instead of store all the history.
No one can know if this is a good idea or not :)
I am generally in favour of competing against bigger players. You'd have competition anyway - sooner or later.
For what we know the company could go bankrupt or pivot into a different and more profitable space. Or the company will not be able to handle all the demand. Also, there might be customers that will seek alternatives because of money or other personal reasons. It is also possible that the space is big enough for many more players...
Focus on finding and keeping your customers and you will see for yourself.