The other day, I was discussing the inception of Loomly on a podcast, when the host asked me, “Wasn’t it a bit scary to launch a new product in a mature market with substantial competition?” In the same vein, during initial investor calls, the concept of “crowded verticals” almost always comes up. And when we have casual conversations with outsiders, we are sometimes pinged on whether similar tools pre-existed Loomly.
All of this is perfectly reasonable and makes sense. At the very least on the surface. As soon as we turn to our 4,000+ customers, then what we hear actually sounds more like, “I have been looking for something like Loomly for 10 years” or, “I have tried 10 different solutions until I finally found your product.” Pretty stark contrast, right?
Just because a market looks crowded, does not mean you cannot build a viable business upon it
even disrupt it with a new vision and broader ambitions. In this article, I will be sharing the perspective of the Loomly team on competitive verticals, and how to make the most of those, in the hope that this kind of macro-level market analysis does not stop you from building a great SaaS company.
The upside of a crowded market
The very term “crowded market” comes with a built-in negative connotation, as we spontaneously associate it with higher competition, slower growth and lower margins. That’s just one side of the coin.
Alex Turnbull is the Founder & CEO of Groove, a simple support platform for small businesses. Back in 2016, Alex was explaining why he decided to jump on a competitive market rather than going after an untapped one.
Fifty other companies trying to solve the exact same problem? Fantastic. I’ll take that over trying to convince people of a problem they didn’t even know they had. The frenzy of customer support software companies shows that it’s a problem that people want solved.
A thousand times yes! Like anything, competition does not only have downsides, it also comes with its own set of perks. Competition offers validation, usually means strong demand and is easier to beat than non-adoption. In that sense, competition maximizes your chances of making something people want. Isn’t that the only thing that matters at the end of the day?
Now, if you are open to the idea that crowded markets can present new opportunities, you must be wondering how you successfully activate that market.
How to penetrate a crowded market
A crowded market is characterized by a significant number of existing players, typically addressing the same problem, need or pain point, which is why the first thing to determine when looking at a crowded market is this:
Is that pain point actually the main pain point of the target market (or is there something underneath it)?
Is that pain point addressed properly (the right way)?
Is that pain point addressed completely (in full)?
If the answer to at least one of the three questions above is “yes,” chances are you have identified a gap worth filling for a niche audience on the market. If the answer to all three questions above is “yes,” then you may very well be onto something much bigger.
As Anthony Kennada, VP of Marketing at Gainsight puts it in this podcast with Battery Ventures:
Analysts wanted to put us in pre-existing buckets that align to their research areas. […] ‘You are a pro-active version of customer support. […] Or you are a CRM.’ […] There are all of these little pieces of who we are, but it does not tell the whole story. So we found ourselves at a crossroads – we could either take a challenger position against an incumbent in an existing space like support or CRM or we could go where our conviction was leading us and build a new category.
This is exactly what happened to us at Loomly. In our early days, we tended to be seen as a new alternative to traditional social media management software (including schedulers, while our MVP did not even offer scheduling capabilities), this never felt right to us. We have since outgrown this label to become a full-fledged brand success platform, that empowers marketing teams to collaborate on, grow and protect their brand online.
If you have a big idea to penetrate a market that appears crowded, then category creation is a strategy that will allow you to set the rules of the game, be seen in a different light and grow much faster while receiving much higher valuations from investors than companies bringing only incremental innovations to market.
Whether you decide to address a niche or to create a new category, there are three best practices you can leverage to win in a crowded market (hint: it has a lot to do with product led growth).
Top 3 key success factors in a crowded market
OpenView’s very own Kyle Poyar brilliantly covered the topic of product differentiation and I could not recommend you to read his blog post enough. Here’s what we have found to be effective at Loomly.
1. Frictionless experience
In a recent satisfaction survey, we asked Loomly users a very open question, “What do you enjoy the most about Loomly?” We were (pleasantly) surprised to learn that more than 66% of respondents spontaneously cited Loomly’s ease of use or user interface quality as a source of satisfaction when using our platform. That was, by far, the most popular answer we received.
As a self-served solution, Loomly allows users to start a 15-day free trial without talking to a sales representative or entering a payment method, while having unlimited access to our features. We have also put a lot of effort into designing a self-guided onboarding experience, letting new users get a tour of the product at their own pace. All of this with a clean and user-friendly interface.
According to the feedback we receive on a daily basis, this contrasts significantly with many other players on the market, who tend to either gate their platform behind a demo request or a paywall, offer a frustrating new user experience, or have not built their user flow around clean design patterns & best practices.
Most importantly, making it as easy as possible for new users to take Loomly for a spin does not only help with the activation of new customers. It also fosters team sales by streamlining adoption of the solution by new collaborators who join the party along the way from an in-app invite.
2. Outstanding support
At Loomly, we think of customer support and success as training wheels. You can enjoy the ride without ever noticing us, but whenever you need us, we are here and we are glad to help so that you can keep on going like nothing happened.
To be more specific, we believe outstanding support is seamless, responsive and courteous. We currently operate with a case resolution rate close to 100%, a median response time of 18 minutes and probably one of the warmest & kindest tones in the industry. User can reach us over chat from within our product, through our contact form on our website or on social media at any time. Oh, and every single user is encouraged to send me a direct email — on my actual address — any time they need anything so that I can assist them personally.
This shared obsession for happiness delivery within our team has greatly supported our 600% revenue growth in 2018 and is continuously rewarded with incredible love from our customers:
3. Continuously-fast improvement
I built the first version of Loomly to make the job of my partner (and spouse) Noémie easier when managing editorial calendars. Simply put: I was the developer responding to her needs as a user.
The company may have grown significantly since then, but the same philosophy still applies and has actually scaled up pretty well: our success team speaks with more than 100 users every day, and we thoroughly take note of every single bug report, feature request or improvement suggestion we receive.
Coupled with the agility of our relatively small team — our biggest competitors are anywhere between 10x and 100x bigger than us — this growth mindset allows us to constantly make our platform better, at blazing speed. Guillaume Cabane, former VP of Growth at Drift, explained in this podcast (in French) how their engineering team was leveraging a similar agile approach to challenge their market’s leader, Intercom, by shipping 10x more features than them.
Beyond influencing day-to-day operational priorities, industrializing feedback collection and analysis — and acting on it — presents an additional, often overlooked benefit: understanding where the market is going. Not only where it is today, but where it will be tomorrow. In the same vein as the thousands of touches of paint of an impressionist painting come together to draw a clear picture, each customer feedback item contributes to forming an obvious vision of where to take the company in the long run.
In a word
As far as Loomly is concerned, there is no doubt that these three precepts — frictionless experience, outstanding support and continuously-fast improvement — have largely contributed to the rise of our solution so far.
If we did it, you can do it too.
As they say: first they ignore you, then they laugh at you, then they fight you, then you win (if you are wondering, no, this is not a quote from Gandhi). So, if you have identified an unsatisfied need on an apparently crowded market, please, do yourself — and ourselves — a favor: go build that killer SaaS business.
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