Industry Analysis3:05 with Pasan Premaratne
Before we conclude, we need to look at what our competitors are doing, how the industry is shaping up and what we're getting into by jumping into this market.
Awesome, we're almost done with our business model. 0:00 We've pretty much covered all the different aspects or 0:03 moving parts, and we have a good idea of how we want to start out. 0:06 But we aren't operating in a vacuum. 0:10 It's always important to take a look around at the current state of things. 0:12 What the market is like, who's in it, and what have they done? 0:16 When starting a business it is important to understand the kind of 0:20 market that you are getting into. 0:23 Is this a well-established market? 0:25 Are there a large number of customers already? 0:26 Is there an existing market, but with gaps, where a product designed for 0:29 a certain segment's specific needs can succeed? 0:33 Or is this a brand new market? 0:36 The type of market determines how much you need to spend on marketing and 0:38 sales and thereby dictates your cash needs. 0:42 Keep in mind, that just because current market participants behave in 0:46 a certain way, we don't have to do that. 0:49 We don't have to implement a revenue model just because everyone else is doing it. 0:52 On the flip side, there are trends or 0:57 certain characteristics, that are worth paying attention to. 0:59 You could create a mobile app, and sell it for 1:02 $25, because you want it to be different, and everyone else is selling it for $0.99. 1:05 But customers have come to expect a certain price point for apps. 1:10 And venturing outside this norm, will be difficult. 1:14 It doesn't mean that you shouldn't, just tread carefully. 1:16 What are some of 1:20 the other important points when conducting an industry analysis? 1:20 How large is this market? 1:25 It's always good to understand if there's more room in this market to grab some 1:27 profits or if you're going to have a really hard time. 1:31 Who else is in this particular market? 1:35 Who are our competitors? 1:37 Once you compiled a list of these competitors, 1:39 dig in further to understand their characteristics. 1:41 What are they doing for their customers? 1:45 Is their product or service similar to what we're offering? 1:47 What needs are not met by existing players? 1:51 And how can you improve your product or service? 1:54 You also need to look at what their price points are, 1:57 and what features are they highlighting. 2:00 Understanding your competitors will help you get an idea of 2:02 existing industry norms. 2:06 For example, earlier I decided to go with a product feature dependent pricing tier, 2:08 that has a basic and a pro component. 2:12 But looking at almost every single app in project management businesses, 2:15 it seems like the norm is a free tier in the beginning, so 2:19 that customers can play around with it. 2:22 And get used to the app, without having to pay. 2:24 Let me give that a try as well. 2:27 It will definitely help increase my acquisition funnel. 2:28 And industry analysis is the last component in our business model canvas. 2:32 It well help us form a better picture of what our plan is moving forward, and 2:36 how we are going to implement it. 2:40 There are lots of different questions you can ask based on the type of market, 2:42 the type of company you're creating, and your customer base. 2:46 Rather than talking about each and every possible question, I've complied a list 2:50 for you, which you can download from the notes section of this video. 2:54 Figure out what type of market you are in, and look over some of 2:58 the questions you should be answering when exploring your business model. 3:01
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