Here at Iconic Offices we are surrounded by incredibly talented entrepreneurs and business troupers on a daily basis. And so it really is a no-brainer for us to pick their brains, have them share their experiences and provide us with any words of wisdom they can muster. Below, Maximilian Thiel ( entrepreneur and head of Customer Success at Travel Open Partnership), discusses his experiences of starting up (numerous times) and the 3 most important questions every startup must ask themselves.
Maximilian Thiel –
Our core team, for the most part, has been working together for approximately 2 years or so, with individual members being added recently for the new project, Travel Open Partnership. It is in this time that we have proposed several new business ideas and so it was important for us to be able to identify the ones worth pursuing. As a result, we have developed an internal process to help us evaluate the potential for each idea and found that it was essential to look at 3 questions in particular, we will come to these shortly.
In 2016 we developed Event.cards, a web-app based networking software for events, conferences and any other professional gatherings. We had 1,000 users, and were iterating at about 2 versions per month – pretty damn fast! This project was as close to the perfect startup as you can imagine, in terms of progress, speed and agility. However, there were a few obstacles we would soon face and this was primarily due to the market itself for events.
After conducting market research, we found that the market was about 300M per year, which is decent. However, it is also an incredibly fragmented market. Given that very few conferences would be run by the same company meant that a huge effort would continuously be required from sales. In addition, having such a fragmented market increases cost, and since we were bootstrapped, this was a huge hurdle.
This product was a passion project for me, however, the above concerns were consistent and unavoidable and so we decided to retire the project with a fully-built MVP in place. As a team we made this decision, and we are reusing a lot of the technology we built and utilising it for our new project. Nothing goes to waste.
So how did we come up with our current startup idea? There are a number of criteria we use to evaluate any new ideas for a project or company and 3 in particular which I will discuss with you now.
1. How big is the market?
Events were worth about 300 million per year, however online travel bookings (depending on the source) are worth about 90 billion globally. A massively increased market size improves the odds of creating a valuable niche or carving out a massive business. And yes, generally speaking a bigger market will also mean more competitors, but this also typically means an increase in the number of available customers too!
2. How much market share can you feasibly take?
A 1% market share in a 300M market (3M) is a nice lifestyle business, but even a high market share doesn’t make for a huge, scaling startup. A 1% market share of a 90bn market (900M) makes for a massive market, and with room to grow you have the potential to create a high-growth, scaling startup. Even if there are more competitors in that large market, it means that there is money to be made (kind of necessary for a business) and usually consists of a much larger amount of potential customers. In a market with only a few hundred companies, the contracts will need to be much larger to create a massive business. And in a market with many customers, it’s the reverse. Many of the huge brands in business today have many small customers for that very purpose.
3. Does the team have the expertise to do this?
For events, our core team were event organisers and had run more than 100 events, all of them professional and with a networking focus. Since we had a community of professional attendees, we were able to get feedback early, and iterate accordingly. This was one of the major requirements for 2 iterations per month, allowing us to create new features, test them and find bugs/ improve them as quickly as possible. For our new travel startup, we have multiple team members that have experience working actively in the hotel industry and as a result they have noticed problems in this area and can give their own opinions on the topic. This is what you want – people who have opinions and don’t mind sharing them.
There are many other factors that go into evaluating a new idea, but these are the main three questions we feel are vital and must be addressed before a new idea can be evaluated further.
Written by Maximilian Thiel
Entrepreneur & Head of Customer Services at Travel Open Partnership
Suited and stylish, always smiling and engaging with anyone willing to challenge and pull ideas apart. When he’s not on straight business mode, this non anonymous entrepreneur can also be found head down, earphones in, stuck to audiobooks, always upskilling. In his spare time, you’ll find him hanging with fellow colleagues and members, enjoying a cold beer (he is German after all!).