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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.
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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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