What to do with a startup idea that's more like a perfect add-on for an existing company?
Recently developed a startup idea that is great and checks a lot of boxes in terms of addressing customer paint points however, I realized that there is a company which is dominant in this niche and this startup would surely fail to supplant them due to network effects and the need to rebuild a lot of the infra the incumbent already has in place just to enable addressing this new feature. At the same time, this feature would be a massive value unlock and revenue driver, even for the incumbent.
The company seems small in headcount but I imagine somewhat sizeable in terms of revenue as they seem to be the primary ad network for digital newsletters, paved.com. As such, at a loss as to what to do here - thinking about reaching out to the CEO but not sure what type of proposal would even make sense.
@ktm55 I will be surprised if there isn't a niche customer segment that you can build for and grow initial revenue and customer base. Do not get deterred by competition - that will always exist and is usually a good sign that there's a market out there.
Determine a niche audience
Build a targeted product for them
Grow revenue
Expand customer base
Then either surpass the incumbent or get acquired by them!
So, to be provocative, can you come up with at least one customer segment with unmet needs that you could build for?
@shekisms this sounds like good advice! Do you have any examples of companies/products that have done this successfully? I would like to study their example if possible!
An easy example is: Hubspot carved a niche for itself with SMBs when Salesforce moved up to serving larger companies. Pipedrive exists to serve even smaller companies. All in the CRM space. There are vertical CRM players who serve specific industries, like CRM from contractors, CRM for dentists, etc. etc.
So two dimensions above: a) size of player, b) industry. There can be other dimensions of differentiation as well, e.g. pricing, easy of use, customer service, performance, etc. etc.
In my specific case I am currently building something which already exists in the market and there are several big players out there. But a) they all focus on developers, and b) they have become large, complicated, and pricey. My offering is focused on non-developers and those looking for a simple performant solution.
Very cool. Thanks for the info! Where can I check out what you're building?
Posted about it today. MVP out next week.
@ktm55 - I'm only seeing this now but I'd be more than happy to chat! You can email me at [email protected]
Before reaching out to the CEO, I would recommend doing some research on Paved.com and the digital newsletter industry as a whole to better understand the market dynamics, their business model, and how they have achieved their dominant position. This will help you better understand what value your startup can bring to the table and how you can position your proposal in a way that is compelling to them.
When you reach out to the CEO, you could propose a partnership or collaboration that would enable Paved.com to offer your startup's feature as an additional service to their existing customers. This could be a win-win situation where Paved.com can offer more value to their customers and your startup can gain exposure to a large and established customer base.
Alternatively, you could propose a strategic acquisition where Paved.com acquires your startup and integrates your feature into their existing platform. This could be an attractive option if your startup has developed a unique technology or intellectual property that would be valuable to Paved.com.
In either case, it's important to position your proposal as a way to create value for both parties and to focus on the potential benefits of the partnership or acquisition. Good luck!
I'm not sure if this is even possible, but would it be possible to create a plugin for their program soccer random?
Show revenue, then approach them about a potential acquisition.
Not sure if this is possible, but could you build an extension for their software? Either a plug-in or a browser extension to give their product the added functionality?