Until recently, I was assuming that the market is pretty big. That there's an upside of maybe $10M. Now I've come to believe that the upside is more like $500k.
Initial thought process
In watching poker videos and reading books and blog posts, I'd always been under the assumption that everyone has poker software that they study with. My main competitor is an app called Flopzilla, and everyone in the poker world has heard of them. In all of these books and videos, you see the authors using Flopzilla, and you hear them telling you that you need to use the software to explore more spots on your own if you want to be a good player. It just really seems like something that is pretty universal for poker players.
Of course, this doesn't mean literally everyone who's played poker before. I'm talking about people who play the game at what I guess we can call the serious recreational level. Someone for whom it's a serious hobby. Not someone who screws around with their friends over beer and pizza once in a while. Someone who's actually read a book or two, and who cares enough to consume educational content and study once in a while. I was under the impression that for these types, most of them own Flopzilla or some substitute.
With that assumption, I went and tried to get some sense of what the market size is. I couldn't find any sort of publicly available data on what my competitors numbers are, so I tried to find stuff that would help me guesstimate.
One thing is the poker subreddit. There's 113k subscribers. Another is educational YouTube videos. Some of the more popular ones have gotten 200k plus views. Many are in the 100k range. Then there's a bunch of less popular ones who consistently get in the 10k range. Then there's looking at how many views posts get on a popular poker forum called TwoPlusTwo. Some of the top posts that are "stickied" to the top have gotten 1M+ views.
With all of this, 100k users seemed very plausible to me, and there seemed like there was the potential for hundreds of thousands of users.
Furthermore, I assumed that poker players would be pretty willing to spend money. The game of poker is all about making +ROI decisions. And the types of people who play typically have money in the bank. So I was thinking that my per user revenue could be pretty solid.
I've spoke with some people in the industry, and I've come to believe that my initial beliefs were wildly off the mark.
It seems that the market for this sort of software is maybe 5k-10k users. Way less than the hundreds of thousands I was expecting.
And it seems that people leave their +ROI decision making process at the tables, and don't bring it with them for real life. Two anecdotes:
I was sitting with some high stakes players. Eg. $5,000 buy ins. I had a tool that I built for them that a) they asked me to build, and b) isn't available anywhere else. We were discussing pricing. We went through some back of the napkin math and they agreed that it's easily worth at least $500/month to them. But, they were not willing to actually spend anything like that. They seemed anchored to the fact that other software is much less expensive.
I was talking with a guy who has authored numerous poker books. Flopzilla is $25, and I was charging $5/month at the time. He said he liked the app, but felt $5/month was just way too much for him, given how quickly it adds up to be a lot more than Flopzilla. And this is someone who studies and writes about poker full time, and worked in a high paying job for a long time previously.
The big thing I take away from this is to talk to people in the industry, rather than trying to estimate this stuff on your own. If I had done that, I probably never would have pursued Premium Poker Tools in the first place. I think initially I saw "people in the industry" as some sort of celebrity who'd never sit down and talk to me about something like this, but now I see them as a lot more human and willing.
Another lesson is something I'm still not sure about: that you can't assume people will make +ROI purchases at a reasonable frequency. My experiences certainly point in that direction. And it's not just my experiences, it's the whole poker software's experiences. It seems odd, but I don't see why poker players would be an exception and the rest of the population would behave much differently.