Would you compete in a crowded market?

My maybe not-so-hot-take: The market you're in defines your revenue potential.

People overstate the difficulties of performing in a crowded market. In my opinion, it's much easier to go to a market that already exists than attempt to create a new product category that might require a lot of awareness campaigns before a purchase.

As such, I also think that there are some heuristics to help you become more competitive in a crowded market:

  1. Differentiate and innovate vertically. For Embarque.io, we've managed to differentiate by creating conversion-first SEO content that is also optimized for the brand and the intended audience. We've also refined our content strategy to cater to early-stage businesses. While countless competitors do SEO content, we've done enough market research to learn how to differentiate ourselves enough for people to choose us over others.

  2. Learn about the most relevant pain points with scalable solutions. SEO content creation is much more scalable than offering consultancy advice or providing a high-level strategy. People will always need SEO content to flywheel their SEO strategy.

Another scalable offering is creating marketing and transactional emails. eCommerce relies on these emails to close sales and such. People will always need email copywriters.

My point here is this: figure out which tasks allow your product or service to scale. Ask your clients. Ask your users. Ask people who could potentially be your customers. This is the most important thing to consider when competing in a crowded market. You need to know what processes are actually in demand. Otherwise, you might be competing in a category no one actually wants.

  1. Focus on your branding. I can't overstate the importance of branding. Think of it as your product's personality. Your product might be excellent, but if you can't reach your target customers and win them over, it's going to be hard to survive as a business.

  2. Become a quality leader. Easier said than done. But quality leadership can really boost each customer's lifetime value and allow you to enter long-term relationships with your clients.

  3. Flywheel your distribution. Define a distribution process, double down on it, and find new ones. This is more of an acquisition strategy, but it's a mental framework that can really allow you to grow sustainably, until you're a considerable player in this crowded market.

Any tips you want to share? What do you think about competing in a crowded market?

  1. 5

    I decided to compete in a market with ~170 competitors ;)

    I've wrote an article about this: Having 170 competitors is not an obstacle

  2. 4

    I'll add this; avoid competing in a winner-takes-all market. There will be lots of highly-skilled competition but just a few get almost everything.

    I'm building something in a market that has a few services that are the "main" providers. The product is something that I enjoy, and I'm happy that there are others. I can see what they're doing and figure out which parts I like and will imitate and which parts I think I can do better.

    The fact that there's more than one who seems to be thriving gives me calm. There's space for more than one. It's not a winner-takes-all market. I won't kill their business and they most likely won't kill mine.

    1. 2

      great point, it's reassuring to me too.

  3. 3

    Great post Julian!

    The most difficult thing I see with crowded markets is that you don’t just have to be different enough, you ALSO need to provide most of the features that people are used to from your competitors.

    For example: when the iPhone launched, you could have launched a competitor without a camera, or without an app store, or without an MP3 player built-in. People would have given your product a chance. But 10 years later? Try competing with a phone that doesn’t do any of these things and customers won’t even look at you.

    With Logology, we had a very clear idea on how to differentiate ourselves in the logo maker space (focus on quality instead of cheapness), so that part worked almost right away. Also, there are tons of demand for logos and logo makers, so getting people to try it is no big deal either.

    What’s hard though, is just the sheer amount that we need to build to be able to scale beyond early enthusiasts. Because our competitors have mature solutions with tons of bells and whistles. Most people expect more than just logos from a logo maker.

    So yeah, crowded markets is probably good if you:

    • Have a clear differentiator that you’ve proven can work
    • Have the endurance / funds to build something that’s close to what your competition is offering, so customers feel comfortable purchasing.

    Good news is, you don’t have to spend too much time validating your market. Just build and build and build (but still validate from time to time of course).

    Good luck!
    I know we need it 😅.

    1. 2

      Great comment!

      Yep, true that expansiveness of offerings can work, but only if you have the funds for it. I wouldn't advise indie hackers to do this, though, because of the scope and complexity of undertaking such a project can become intimidating/hurt agile execution.

      1. 1

        yeah, if you can keep growing without going the feature matching route, go for it!

  4. 2

    Blue ocean strat is a good read

  5. 2

    Definitely. Because there is demand. Even if you cater & get to just 1% of the crowded market, you will do just fine.

    What do you think?

  6. 1

    Next year, someone is going to start a gym, a restaurant, a night club, a car dealership and they will do very well. There's really no difference between physical and digital world. Hustle if you want it.

  7. 1

    Absolutely I would...I do with my own project.

    I don't see competitors as bad but rather a validation of the market. Find a niche in the market and own that like a monopoly. I've personally connected with other makers of similar products to share insights and even referrals because the customer was not a fit.

  8. 1

    I'm currently working on a product in the established feature flag and AB testing market.

    My goal is be simpler and cheaper than the top players, but faster and more reliable than the existing small/indie players.

    I see it as a niche. It's not a product niche, but still a niche.

  9. 1

    My brother and I are working in one of the most generic (for now) markets: Business Intelligence. However, where we niched down at this point is working with home health and assisted living centers. We are basically doing custom data pipelines and visualizations. The market is crowded, but there's so much room to grow that its still worth entering. And there's no cookie cutter saas solution to working with non technical people and integrating with older software (which is sometimes what we do).

  10. 1

    Almost every market is crowded...you just might not know it yet.
    Very few original things created.
    Sometimes there is no market...why there is no crowd.

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