Lessons Learned - Week 6

In this week of working on fload we approximated the potential market size for fload, we developed a value curve of fload relative to competitors, and did further testing of our hypotheses regarding fload through additional interviews and our survey.

Approximating the potential market size of a company can be done via two different approaches: a top-down approach and a bottom-up approach. When considering the top-down approach, it is beneficial to first calculate the TAM or total available market, then the SAM or the served available market, and following the SOM or share of market. We performed market sizing for the three different target-segments we had identified in the prior week when developing the personas. Our target-segments are university students, young professionals, and young parents. In total we calculate a potential share of market (SOM) for fload of 118,635 customers. If you wish, just go through our calculations in the following to gain further insights on the TAM and SAM we have identified for the respective target-segments and to check what assumptions we have used for our calculations:

A bottom-up approach for market sizing is often difficult to follow for digital businesses models. A bottom-up approach could for instance mean to identify feasible sales channels and calculate how many sales can be generated via the respective channels. For our purpose we adapted this approach and tried to calculate the potential customer basis when comparing with an already successful competitor – in this case Wunderlist. Please check out our calculations in the following:

When carving out a project idea´s value proposition in more detail it is beneficial to develop a value curve of the project relative to competitors for different target-segments. In that value curve the own project idea or company is ranked according to different characteristics relative to competitors. Developing a value curve is a classic approach when formulating a blue ocean strategy. For fload we have identified eight characteristics that differentiate us from our main competitor Wunderlist. Moreover, we have developed the following three value curves ranking fload for our three target segments relative Wunderlist. Check out the value curves we developed in the following:

We had further learnings related to our class work:

WHEN DEVELOPING THE VALUE CURVE FOR AN IDEA, IT IS IMPORTANT TO THINK ABOUT WHAT YOU DON’T OFFER AND NOT ONLY ABOUT WHAT YOU OFFER.

At first when we tried to develop the value curve for fload, we only identified characteristics that fload would score well on. We are good at data security, good at usability and good at add-on services. However, we soon realized that what is most interesting is to identify what we would not offer to clearly differentiate from competitors. When starting to develop the value curve with this mindset, our analysis proved to me more fruitful in distinguishing the value proposition of fload.

BOTTOM-UP MARKET SIZING IS DIFFICULT FOR DIGITAL BUSINESS MODELS.

Already during classwork many students had communicated concerns that bottom-up market sizing could be difficult for digital business models. When further working on market sizing we noticed that these concerns were partly justified. It is difficult to identify a concrete number of sales when the main sales channel will be the app store. Therefore we utilized a different approach of comparing with competitors to gain an idea of the potential user basis. We would recommend this approach to other groups that had difficulties with bottom-up market sizing.

GAINING A SIGNIFICANT NUMBER OF SURVEY PARTICIPANTS IS DIFFICULT. USE INNOVATIVE APPROACHES!

During the first 2 days after publication we reached 100 survey participants easily. However, soon after the increase of number of responses suffered. We had lots of trouble reaching 150 and 200 participants as we had already contacted our good friends and family to fill in the survey. Therefore we recommend using innovative approaches for participant recruiting. What we are doing at the moment is to contact friends to fill in the survey and to then contact three friends each to do the same. These friends are again asked to contact three more friends. This way we hope to increase the number of participants quickly. We will keep you updated! All the best! Your fload team!