Free market niche = profitability of a business on it?

Why do we burn through

Often, start-ups face the challenge of finding a promising and profitable business, but nowadays the market for many goods and services has long been oversaturated. But nevertheless, businessmen, moving and jostling among already obvious market leaders, open enterprises and are crowded in a “crowded” market with competitors.

Difficult and rare, but sometimes they are lucky, and the business goes up, but more often such ill-considered or sudden steps lead to the collapse of the business. Therefore, before opening and starting a business, it is necessary not only to look at the market, but also to study it in detail.

It seems to be simple, but now I see a trend in the IT market, when customers order something that seems to be with pearl buttons, but the market is already choking with glut. The question is: “Why else do you need there?” But if we are talking about a custom project, then we do not forget the rule - “The customer is always right” and we give him what he wants.

IT market

If clients come to me, they most often want something specific: a website, a specific Internet service, or implement their specific idea for an Internet business. Naturally, I will not persuade them that they should not go where they can’t breathe without them.
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As for their internal projects, before creating them, of course, the entire market and its volume, competitors, and opportunities are studied in detail.

Since I am well acquainted with the IT market, I would like to share my experience in creating one project that is very necessary, but unfortunately this experience was not as sweet as we would like.

Clear sky

It is difficult to believe that now you can become the only “participant” in any market, and also that your business will become profitable.
Having found a free niche in the market, I realized that I urgently need to fill it, and, of course, become the first and only one.
We are talking about the process of registration of trademarks and their preliminary verification. When you come across this, you understand how difficult it is, long and expensive. In the State services, a preliminary check is 2 weeks and 800 hryvnias, if your version of the TM name is busy for another 2 weeks and another 800 hryvnias, and this can last indefinitely. Only after a successful search for a free name for your trade designation begins the process of registration, which lasts even longer and costs even more, but it can not be avoided.

Having decided to make life easier not only for myself, but for many other entrepreneurs, I realized that the preliminary verification process itself is a mere trifle, which is turned into a headache and a stripping of money.

My team has developed an Internet service that allows you to verify in one minute the trademark of existing and already registered TMs in Ukraine. The database is fully consistent with the database of Ukrpatent. And, of course, the price: the cost is extremely low - 32 hryvnia for one check.

Not everything is as sweet as you wanted

Everything seems to be just great - and the service is necessary, and the price is affordable, everyone is happy. Of course, it was not without jambs and problems, but still - the service is ready, it works - just use it.

We estimated the market quite simply: about 1000 people register trademarks a month. We claimed 50% of the market. With simple mathematical calculations, we get - 500 users per month.
We consider the income: 500 multiplied by 32 hryvnia (the cost of one test TM) and we get 16 thousand hryvnia per month. Agree, not so bad for a startup.

Although the market was empty, it turned out to be very narrow and specific, for this reason, there was no rabid influx of customers.
Also, I assume that the matter may be in ignorance and not sufficient trust to the service. Not all businessmen have the time and opportunity to rummage through the Internet and follow the innovations of Internet services.

Promote - do not promote?

You ask: “And promote the service?” Of course, this is exactly what we did, but to invest big money in advertising is completely pointless, since the cost of the service is small and even with a larger number of clients, it will not be profitable.
Perhaps someone will offer to raise the cost of the service, but in this case, people will doubt the use of the service, since one thing is 32 hryvnas to lose, another is 200, and that’s your trust.

We also implemented promotion in social networks, on various thematic forums and portals, but again we faced the problem “narrow target audience”, very few people really need it, but who needs it, then problem number two already arises - not knowing and distrust of Internet services. Frequently, the psychology of people how it works: “I don’t see to whom I pay money and I don’t see a product that I can’t“ touch ”again, so I’m most likely“ thrown ”for money”.
Sadly, there are many such users.

Another problem in our Internet service was that the payment process itself was inconvenient. Few had the opportunity to pay using webmoney. After that we introduced the ability to make payment via SMS, so we are waiting for the result.

Morality

Our mistake was the fact that we went the wrong way to promote and promote the service, now we "promote" it only where there is or may be our potential customers.

Before embarking on a project, especially if it is a startup, you need to study this market in great detail, and both sides are obligatory: competitors and consumers; adequately assess their possible share and only after drawing up a competent marketing plan to draw conclusions - to realize / not to realize.

In any case, the service has paid back the investment in its development and even brings a small profit, of course, not what I was hoping for at the beginning, when it was created.