Tempting Software Startup Categories

Guilty. Invoicing and time tracking fall under category #1 along with project management and bug tracking as one of those things that naturally come to mind when thinking about a startup to work on.

In my case, I'm glad I started Ronin, despite the level of competition out there. I really felt (and still do feel) that I had something unique to bring to it. In my case, it was a certain workflow that I had experience with coupled with strong UX/UI experience. And, I felt the current players in the market were insufficent (for my tastes).

The real key here is to realize that in such a field, there is a large noise to signal ratio. Unless you can rise above that, it will just be 1 major player getting the lion's share of the users and the rest tripping over each other. (In my field, for example, Freshbooks is still the major player.)

On the other hand, if you succeed to the point where you are a level above the noise, you have a built in insolation layer that discourages overly simplistic and naive attempts at entering the market.

If you think you can commit to bringing a noticeable, appreciable and sufficient difference in quality, there's no fear in wading into a well-established field. Almost everyday I get emails from users that have noticed the difference in quality that we provide. However, if you're just there to throw up a half-assed attempt or to be a player with no discernible quality differences, I'd seriously reconsider.

I've come back to this list several times since I first saw it last week. Doesn't it freak you guys out that you're mining for ideas within such a small pie-slice of the human experience?

There are lots of things that can bring a startup down. In my experience most founders are so close and in love with their precious idea that they only pursue evidence and opinions that support their position. So even if there is an opportunity to ask "is there a critical flaw that realistically should keep me from even starting it" most geeks will find a way not to take it. That's why Steve Blank's "customer development" reads as radical to many geeks but it's beyond obvious to people who develop products in the real world.

Fact is, most startup concepts are doomed before the first line of code is written; not because of poor execution, but because the ideas just aren't that great — and they only ask people who love them "too much" to be objective for their opinion. When I tell would-be clients that their idea is not going to be a home run, that they should stop while they're ahead and take the time and money the were about to throw away and take their family on a nice vacation... some get angry, others thank me, and one fella bought a third of my company.

TL;DR version: if your idea is on this list, you're not trying hard enough. Nobody needs your Basecamp clone, but everyone sits on chairs. Design a better chair.

I have fallen into the trap of trying to come up with an idea that is completely unique. Its tempting to look for new categories to attack, while dismissing categories with entrenched players as the lack of competition looks so appealing. In reality, unless you have some highly unique attribute to bring to market, trying to create the new market can be highly problematic. If it hasn't already been done, are your potential customers even looking for a solution to a pain? Also, are you certain that if you found a new market, that the lack of competitors isn't a sign that there really isn't a market?

Even though existing markets are full of competitors, the opportunities in existing areas are much more plentiful. Instead of looking for the next big thing, why not focus for a niche in an existing market, and grow it from there? The competitive landscape is constantly changing, and new opportunities are always being created as the market shifts like the tides. What it often takes is just a new twist on an existing concept. If you attack an existing market, all you really need is an opening through a target niche to gain a foothold, and from there, iterate as fast as you can.

This is actually a list of obvious and highly competitive categories. Perhaps the most highly competitive categories.

Most of these categories are niches that the average person has some experience with and don't require specialized knowledge or connections to create a successful product. Most programmers don't know enough about non-programming fields to build a successful product, so they all tend to pile on in the few niches they understand. There are probably a lot of business opportunities out there for programmers who also have experience in non-software fields.

I often get the sense that any idea I come up with, somebody with funding and development resources has already done it. Is nothing new in the world?

We should turn this into a startup/programmer decathalon. So far I've done 4 of these...to a kid with a hammer the whole world looks like a nail. Maybe I should write the others for fun.

I've heard of machine shop operators that built their own machines. "All you need is a Bridgeport and a Lathe and can build the rest".

Also, I recently shopped for a year for a good time tracking/billing system. I tried many products but non were a perfect fit. Then in desparation I built one in a few days. It improved my skills and improved my code libraries.

(edit: I suppose it's different because I did a year of market research before committing to build something.)

The cup is either half empty or half full. You can look at this list as a list of oversaturated markets or as a list of markets that have produced some great innovation and probably will continue to do so in the future. Hell, take Mint for example. They came after wesabe, fit squarely in the personal info space and are considered successful by most (not based on their sale, just the service). Looking at issue management: are Jira, lighthouse, trac, bugZilla, etc the best we can do? I doubt it.

Fundamentally I think any idea you are passionate about is worth pursuing. Nevermind the judgements of naysayers and lists of supposedly typical idea space.

"I just find it curious that these specific themes tend to occur again and again."

The markets for each of these categories is huge with plenty of room for innovation in specialized niches. It makes sense to me to see plenty of competition in each category.

That said, they do tend to line up pretty well with the demographic involved in your typical internet startup:

Project Management/Bug Tracking = Developer

Discussion Forums = Gamer

Music/Events = Hipster

Dating and Match-Making = Single

And there you have your computer programmer with ironic t-shirt, no girlfriend and a level 70 mage in WoW.

Personalized News Aggregation/Filtering: Having personally witnessed a few flame outs in this category I can honestly say though this area has lots of ideas and interest you will find very people willing to actually pay for personalizing it at any price point. Move along. No revenue to see here.

since when does "over-saturated" == "tempting"? But I think I get the point ... none of these are tempting to me (except maybe a twist on a dating site) but I suppose they are for some.

It would be interesting to see a brainstormed list of the most underserved categories. I remember that one of PG's essays has a list of things he thinks could use some startup love, but I'd be really interested in what other people think, too.