MARKET RESEARCH 3 - TOP WEB/MOBILE APPLICATION MARKETS, TRENDS & NICHES
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Before you dive into your next startup, it’s imperative you know all the opportunities available to you. There are many markets, trends and niches, and some more than others just waiting for you to solve their problems. I think it’s very important to be able to imagine products in all these niches so you can compare what’s really the best startup for you to tackle next. Doing so will of course greatly improve your product imagination muscle. It will also make it so you can more quickly digest Techcrunch, Mashable, Gigaom, ReadWriteWeb on a daily basis--you’ll know exactly what sort of startup you’re looking at and what problems it solves with just a few words about it. I can just skim article excerpts, sometimes just the blog article title, and sometimes just the name of a startup to know precisely what it does, and most of the time I’m right. You should be able to do the same if you think you have the magic ability to predict what the market needs next.
So below is a list of all the markets, trends and niches I can think of for 2011. I made the list just by going through the last 20 pages of the aforementioned top tech blogs in order to remind myself of all the niches available. Here’s the list with a quick description for each:
1) Deals - think Groupon, JetSetter, even Coupons.com, etc. With the economy being messed up, it was the perfect time for the Deals market to explode. Various gimmicks from “flash sales” as provided by Groupon and Living Social to location based deals as seen in Foursquare have proliferated as a result.
2) Search - this niche doesn’t get as much attention as it has in past years due to Google’s dominance, but there have been new players, of which Blekko is the biggest one. There are also related products like Qwiki.com, which offers a generated media experience for tons of topics you can search for, powered by Wikipedia.
3) Local - Foursquare, Gowalla and Loopt pioneered this market--i.e. the “checkin” game--in 2009 and 2010. It hasn’t exploded as quickly as people might have thought, basically because it’s restricted by the pace at which smart phones become popular. However, Foursquare, in particular, has stayed steady, and has made smart moves like partnering with Groupon & Living Social to stuff their app full of deals. It’s been said non-stop that checking in and giving out your location will only become mainstream when the quality and quantity of the deals catch up. Foursquare is on their way to making that happen. On a side note, I really feel like Apple and Google will do something major to flank everyone by injecting some serious tools to get deals into their iOS and Android phones, respectively.
4) Video - video has long been dominated by Youtube, though with the majority of the content being low quality. Over time a middle tier has emerged of professional content. And lots of niche-specific sites have been created to target their corresponding audiences. One of our client startups, CrimeTV.com, is a perfect example of that in how it features only video of crime movies, shows, etc. Lots of people have video creation tools now. Expect more niche video sites to emerge, and auxiliary services like ZenCoder.com to help you convert your video. Also, HTML 5 has greatly simplified the the tools and skills it takes to put video on your site since you no longer need to know how to code in flash’s somewhat obscure ActionScript programming language. Expect more tools like ZenCoder to emerge and to combine with HTML 5 to eliminate all challenges related to getting a professional video site going; and then expect everyone to be doing custom video--and that mainly means custom branded video players.
5) Big Data - this market is one of the fastest growing. Gigaom.com does a great job covering this niche. They seem to have made a point of focusing on it. Incumbents are mainly focusing on 2 things: productng intelligence from large data-sets and using Hadoop to do so. I would also lump in companies like Xeround, NimbusDB, ScaleDB, and ScaleBase, who are working to make SQL scalable in terms of load and data size in a way that allows application developers to connect to their databases the same way they would as if they had one simple MySQL database. Techcrunch doesn’t cover “Big Data” much because they focus mainly on consumer-facing startups, but there are some extremely smart guys out there in an arms race to build solutions that can handle the exponentially growing data-sets we’re all spitting out day in and day out on facebook, twitter, youtube, etc. Every day, each one of us is contributing more data than we were the year before (according to a report by Facebook on its users’ sharing patterns), and applications need to be prepared to handle this. Guys in this market will provide those solutions, and ultimately all the tools approaching artificial intelligence to produce serendipitous results for end users.
6) Gamification - this niche is an important one. Companies like BadgeVille.com provide tools you can easily embed in your site to provide the incentives that go along with gaming. The idea is you can motivate users to perform normal actions such as commenting by giving them a badge, or status, or virtual goods, etc. Expect gamification to gradually grow and become more apart of the sites you frequent in new and unique ways. There are endless ways to shape the dynamics of a game. Expect to see tons of twists in gaming rules and rewards that sit in juxtaposition to the natural things you do on a site to both enhance the experience for you and get you doing the actions the site owner wants you to do.
7) Payments - it’s all about mobile payments right now, and NFC payments made by waving your phone. That’s what this is all about. Facebook credits are also worth watching, and most likely will become a mobile payment platform as well, but not for a few years.
8) Advertising - Advertising is a huge market with tons of sub-niches. For example, in-photo advertising startups like Luminate.com (formerly Pixazza.com), Gum Gum, and a few others stuff advertisements into the relatively small space provided by photos. And there are of course in-video advertising networks, and many many other twists on the advertising network model. HTML 5 and tablet advertising is on its way up. Location based advertising where the ads know what stores you are near of course is huge too. Wherever an ad can be slapped, an advertising network company will plop up to serve ads there. Whatever information can be used to make ads more targeted will also serve as the basis for a new advertising company. This niche has been big since the dawn of the internet and will continue to be forever.
9) Games - I won’t say much about this market except that a ton of tools have emerged to create cross-platform games that work on iOS, Android, HTML 5 web browsers, etc. Sibblingz is one such company, and here’s a few more: Unity, Corona, AppCelerator, etc.
10) Augment Reality - Layar is the biggest player here. They and competitors--for now--allow you to aim your phone at the world around you and see popups containing information about what you see. So basically these apps detect what’s in the real world. Can’t wait for all this stuff to make it into my contact lenses! ps. not too many entrants seem to enter this space--probably because it’s a long 10-50 year fight, but don’t take your eyes of this niche. We’ll probably get a breakthrough soon that will change the game.
11) Messaging - Twitter, group messaging platforms like GroupMe, and even Facebook fall into this niche. Messaging and communication is where all innovation has happened first on the web. After all, the power of the web is how it can connect you to others. Startups like Lissn have tried to “pull a twitter” and invent a new twist on communication. Expect many startups to continue to find new ways to shape the communication experience.
12) Cloud Computing & Infrastructure - Amazon AWS, OpenStack, MySQL scaling guys like Xeround and ScaleBase, Eucalyptus, etc. To me it’s all about Amazon AWS and ultimately nothing else. Scaling big MySQL databases isn’t solved yet, but the aformentioned guys will, and I assume Amazon will eventually buy one of those companies and in doing so will continue to provide the complete scaling package.
13) Mobile/Tablet Interfaces - to me we got two kings here: FlipBoard in terms of native iOS code on the iPad, and OnSwipe in HTML 5. Both are leading the pack in terms of the interfaces we expect our news content presented within. Expect them and lots of other guys to push the limits from what we expect out of tablet interfaces. A lot can be done with the gestures they can sense that hasn’t been done yet. Also, watch out for jQuery Mobile which is a obviously a jQuery platform for coding sexy mobile and tablet interfaces. It will bring sexy touch HTML 5 interfaces to lots of sites soon.
14) Marketplaces - AirBnB, GetAround, Red Beacon, ZocDoc and tons of other sites offer a place where you can hire service providers in a specific industry, or where you can rent a place or car from someone else. I’ve always loved marketplace sites. They have easy business models to pinpoint--just charge a cut of a transaction--and people don’t mind paying those fees. They expect them. As more and more people get on the internet, more and more antiquated industries are being made efficient through the internet, while the middle-man charging exorbitant fees are being removed. There’s always a new market (or, rather, an “old market” that’s under-served) waiting for its two opposing parties to be connected.
15) Content - in this category, I’d put the Huffington Post, blogs like Techcrunch, and all the other top news destinations, information libraries, etc. This niche isn’t the sexiest of niches, and isn’t really one that you innovate within through genius software concoctions, but nevertheless it needs to be mentioned. You can still go out and make a great content site around some obscure niche and sell ads at a premium to your highly targeted audience.
16) Q&A - here Quora is obviously the golden child of the month, but other sites include: StackOverflow.com for programmers, and ultimately the millions of forums on the net. Q&A has always been core to what the internet is about. It’s where you go when you absolutely need to find an answer and can’t do so in your regular life. You reach out into the world hope someone anywhere across the globe may have the solution. And they usually do! Startups will always be finding more efficiencies to getting the answers you need.
17) Social - social is basically a part of every niche these days. It’s not enough to be just a social startup anymore since Facebook nailed it. Every application basically must have social component to connect its users together. End of story here. You can’t just make a “social network” anymore and hope to hit it big. Build a service, and make sure it’s very social.
18) Support - products like ZenDesk dominate here. Even bug trackers like Fogbugz solve support by turning emails into tasks. There are a lot of players here. Others include Get Satisfaction, Assistly, etc.
19) Project Management & Productivity - there have always been a ton of project management, to do list apps, and productivity tools. The reason is because software developers need these tools as part of their daily work, and therefore they all seem to think they have some original twist on how to make teams more productive. The biggest players are Yammer, Social Cast, Fogbugz, Pivotal Tracker, Light House, and many many others.
20) Music - the leaders are Spotify, Pandora, Groove Shark, Rd.io, Last.fm. We all love music, and startups continue to fight the record labels here. For a while, it seemed like it was going to be impossible to make a profit here, but it seems that it’s possible now. I wish Groove Shark would figure out how to play by the rules more and get into the iOS app store! They’re my favorite music application.
21) Photo Sharing - Instagram, Path, Color, and Facebook itself. With the rise of taking high quality photos via your phone, photo-sharing has become extremely popular. I’m not the biggest fan of this niche. To me, it’s boring, and I think there are bigger more important problems to solve, but hey, to each their own.
22) Analytics - I love the analytics niche. Metrics is a great niche to make money out of. The reason is because it produces is actionable results that can help customers of these tools make money. These tools innately justify their monthly fees by showing you where you can make more money. These companies also never have the “chicken and the egg” problem where you need 2 parties to make your app useful, and without one you can’t get users of the other type, and therefore it’s very hard to get any users. Marketplaces like AirBnB, and real estate startups that connect agents and home-owners to those looking for dwellings, generally have these problems. But metrics startups don’t require a critical mass of users to become successful. The creators of these startups can just focus on making pretty graphs and crunching tons of numbers. Then they can charge away to each customer they can signup without having to wait until it has users or data/content of its own to become successful. Examples include ChartBeat.com, Viral Heat, BackType, GoodData, Mix Panel, etc. Keep in mind these products each provide different sorts of metrics. For example, Chartbeat tracks visitors on your site in realtime, Viral Heat tracks your social media footrpint, and Mix Panel tracks engagement on your site.
23) Education - this is basically the largest under-served niche. It’s no secret what’s going on here: current incumbents won’t let technology innovations into the schools, and lots of legislation is required to change things, etc. My startup DreamMakerApp will revolutionize this industry through its new take on how to structure information and easily learn from it. I also see lots of startups emerging on tablets to replace textbooks. One big player in this space getting a lot of buzz is Khan Academy which offers user generated videos on tons of topics.
24) Ecommerce - like communication, ecommerce has always been at the heart of the web. It’s where you communicate through money/transactions. Ecommerce isn’t as sexy as it once was since in the first half of the 2000s every store and their mom’s store went online to sell xyz widgets. There are still new flavors of ecommerce being invented though. For example, Style Factory.com has added the twist where people can vote on how and what custom furniture will be built, and Groupon et al in general have added the “group buying” twist to motivate people to buy in mass when a sale “tips” and enough people want it, at which point a deal is unlocked.
25) APIs - I love API companies. One of my particular favorites has always been Twilio--probably since I’ve used it a lot. Twilio is an API to easily send and receive text messages, and eve phone calls. API companies are highly technical and require thorough technical infrastructures to be snappy, but evade a lot of the “chicken and the egg” critical mass problems because they can make money even if they just have a few customers.
26) Site Builders - there have always been tons of “site builder” companies. Every developer and their mom has the light bulb moment where they realize they can make their work for clients easier if they build a tool to generate a website so they don’t have to build it from scratch each time. So there are lots of takes on these sort of tools. OnSwipe for example is pioneering this space for building tablet-optimized sites. For a lot longer, Mobify.me has been doing the same for mobile phones. For websites, my favorite site builders are Flavors.me, SquareSpace, and Yola.
27) Healthcare - Microsoft Health Vault and Google Health have both tried to make big plays here. Just this summer Google Health shut down though. It shut down because people weren’t interested in a health records file cabinet, and what was really needed was a way for people to save money, and for clinicians to be able to make money even if they don’t see you in person. In the US, clinicians must see you to be reimbursed by insurance providers. Therefore any digital tools that reduce how often you have to go do doctor appointments don’t create any value for clinicians, and therefore such tools won’t take off. This niche is in desperate need of legislative reform. To my readers, do not enter this niche. Not yet, at least. I do have a vision for the future when your phone can give you all your vitals, and you can plug into a simple station and get reports from doctors around the world, etc. And several companies have started to deliver on this. Although they’re not too advanced, they definitely highlight this future I’m talking about.
28) Crowdsourcing - my favorite startup here is CrowdFlower.com. They provide tools to divvy out tons of small tasks to remote workers (usually in India) to execute them in a high quality way. It’s built on Amazon’s Mechnical Turk--which is a marketplace to do just this--but it adds various tools to produce higher quality results. For example, it lets you feed in a few intentionally super easy tasks, and remote workers that get them wrong are rated lower. That allows you to build the best team of remote workers and get the best results. Other crowdsourcing startups I love are 99designs.com and CrowdSpring.com, which let you crowdsource design and web work. To me, crowdsourcing is what the web is all about. My upcoming startup, DreamMakerApp, is all about crowdsourcing knowledge and learning. Crowdsourcing is how we as a human race will become exponentially smarter through working together. We’ve only touched the tip of the ice berg here. I anticipate tons more tools this century being released that help harness knowledge and contribution to quickly get results through distributed labor.
29) Voice/Visual/Gesture/Etc Recognition - i love startups in this advanced category of interrupting complex input and figure out what it is, whether the input be voice, still images, faces in particular, moving images (i.e. video), gestures, etc. I don’t know too much about the actual algorithms that power these applications, and I’ve always wondered when voice recognition would get perfect and what sort of machine learning it would take to get there, but I do know that these tools do get better with each year. I still think it’s going to take some major machine learning break-through unrelated to the recognition niche before these tools really hit the spot. Right now, it’s still hit or miss, but when it’s accurate, it’s awesome. Facial recognition has gotten pretty useful lately, like when you’re tagging photos of friends and it can assist you in getting it done quicker. Gesture recognition has also gotten very good thanks to the iPhone and iPad. There’s not much else I can say here except I can’t wait for recognition technology and the corresponding sensors needed to collect the input to become widespread and part of our daily lives, just automating everything for us. I bet we’ll get there by the end of the century.
30) NFC - NFC is about to blow up! Period. Not just for lame-ass swiping of your phone to make payments. I imagine a world where you walk into a store, and as you peruse aisles, your phone is aware of each product you pass and makes a virtual/graphical representation of the same things on the shelves. And when you pick an item up and put it in your physical cart, an application on your phone knows you picked it up, and totals its cost with the other items in your cart. NFC isn’t just about phones. What’s going on here is they’re working to get little passive NFC chips built into products instead of bar codes. There is a consortium for this, and their goal is to bring the price of those NFC bar code chips down to 5 cents, and once that happens this technology will be affordable enough to start putting in all/most products.
31) CRM - SalesForce is king here. Sugar CRM offers an open source solution. Bantam Live, which was acquired about a year ago by Constant Contact, was a social CRM with a Yammer-like interface. There are a bunch of other social CRMs which basically aim to make Twitter a CRM tool when people complain or mention your product. They allow customers to flow in from Twitter into their platform built on top of it. Also, when companies like Foursquare build their little business panels for business owners to see is checking into their stores, that’s also considered CRM. The analytics within Facebook’s “pages” tools are also very CRMish. Basically any product, especially marketplace apps, that have one party selling a service need CRM tools to manage all the leads coming through the product/marketplace.
32) Finance - from tools that predict stock trends based on data from Twitter to the Zecco’s and eTrade’s to peer-to-peer lending marketplaces like Prosper.com and LendingClub.com to social investing tools where you can see what others are investing in and invest like them, finance will always have a place on the web. If you don’t come from Finance to begin with, don’t build a startup here though.