Over the recent years, I’ve had the fortune of hearing numerous pitches and presentations. Some as a potential client. Some as an advisor/mentor. And some as just a friend. The sad common denominator in a large percentage of these presentations is the lack of a marketplace audit. Invariably, the listed comparables are behemoth entities that may, or may not, serve the needs the entrepreneurs are offering. Or, the overall market-cap for a vertical is listed with the graphic conveying, “if we just capture 1%…”. Either way you slice it, there is not enough consideration given to what the market holds or will bear. There are very few brand new ideas, so there will always be a need to find and bubble up direct competitors – small, large, and even defunct companies. This action could save you the embarrassment and hard work thinking you are the only ones who have tried a certain something-something.
A perfect example is a pitch I recently heard related to Travel. Beyond comparing themselves to the likes of Orbitz, Travelocity and Kayak, and pointing out a market size of 1 Million people spending $50B annually, they had some compelling ideas that could make them stand out – or so we were led to believe. Regardless of how we might have thrown out the comparisons to the whales and total market value, their intimation that nobody was doing exactly what they do – in it’s simplest form, allowing the booking of activities, tours and more within a comprehensive app – would perk someone’s ears.
Perhaps it was just random timing, but the very next morning, I saw a number of announcements about a $10M Series A funding for www.Peek.com. One example of the announcement was in USA Today, but there was more coverage in NYT, WSJ, Tech Crunch and more. I wouldn’t have expected that the entrepreneur could have known about that impending funding round announcement, but if they had done research on apps that allow for travelers to book tours and activities, they probably would have included Peek as someone in the space. (I recognize that, as I only saw each presentation once, I could have missed its inclusion.)
You can see below what searching for Travel Activity Booking on Google would have delivered.
Through a further exploration, they would have found the Crunchbase timeline of Peek to learn how they got to where they are and who their main investors were way back in 2012 (Jack Dorsey of Twitter, Eric Schmidt of Google) when they raised $1.25M in 2012 and then brought on other heavy-hitter investors in subsequent years.
From this, they could also find that another potential competitor, Viator, was acquired by TripAdvisor for $200M in 2014, then fall further into a rabbit hole to find other players in the field (Triposo, Gogobot, Granada, Afar…) Or, they could have found a possible partner like Rezgo.
Not to say that there aren’t great possibilities/opportunities in the company that made the presentation, but they could have had a veritable deep-dive history lesson and positioned themselves more realistically if they had looked in the right places – or spent the 20 minutes diving like I just did. Again, I don’t know that they didn’t look, but they did get up and say there was nothing like what they were proposing.
With the deeper histrionic knowledge of the competitors, I know the new company could be a good idea – it just requires more thinking and a lot more consideration of partnerships and marketing spends in order to get into the market more quickly and more strongly – if they were to ever become a reality.
Without the proper consideration or exploration of the marketplace – and worse, the belief that nobody out there is like them – any entrepreneur is hurting their idea and themselves. Any investor, client, partner is going to appreciate the knowledge that something is out there and how you’re going to differentiate your product.
Sadly, such an action might lead to your not being alone in the category of passed-over great ideas.