Here’s a scenario that happens too often. Let’s create an entrepreneur creating their first cryptocurrency saving app, we’ll call them Alex. You’ll know from our previous blogs, there are enormous demands for cryptocurrency apps and solutions. We even have a whole blog on how to build a crypto saving app
Despite the popularity of their market, Alex hasn’t run the necessary market research. They’ve skipped creating personas and competitor analysis. With such a broad market, they haven’t identified what makes their app unique. Alex doesn’t understand the legality of cryptocurrency. More than that, Alex hasn’t committed to understanding cryptocurrency trends or the scalability of the app’s technology.
Before even creating their MVP, Alex’s start-up has failed. You should never stop your market research, no matter the size of your industry. These are some powerful research tools that’ll put figures into perspective. TAM, SAM & SOM:
TAM refers to Total Addressable Market. It addresses the market demand and revenue for a service or product. SAM refers to Serviceable Addressable Market. This looks at your product or service within a specific area; like a geographical reach. Finally, SOM refers to Serviceable Obtainable Market. It addresses the portion of the market you can realistically target with your product or service.
This is information investors down the line will want to know. They provide a roadmap for your app’s future with metrics and figures. You can find more detail on how to calculate your TAM, SAM & SOM over here
.Understanding Existing Competitors:
You’ll want to know all you can about your market. So Alex, with their cryptocurrency app, will want to know about Coinbase, Bittrex and Kraken. They’ll need to look at their market share
, distribution and pricing models.
First, find out what you can get from public information using tools like Sensor Tower
At this point, you’ve got a lot of research under your belt. Now you’re equipped with personas, metrics and competitor analysis. Just one more step before you can start building.