Since we created our start-up, we’ve been in a constant scramble by developing our services, keeping up, and getting better. We’ve been mainly focused on today to keep the business running tomorrow… However, we’ve recently decided we need to spend some time (that’s the biggest problem in a start-up, you never have enough time!) in defining a business growth strategy.
To this aim, we applied and were selected as one of the 16 participants in the 2015 Acceleration Strategic Workshop offered by IESE Business School and we were also selected to participate in the Mentoring Programme organized by the ESADE Business & Law School). Great! We now have the two best business schools from Barcelona helping us somehow defining this new business growth strategy. Note that this year Financial Times has ranked IESE Executive Education – Customised Programs, 1st in the World and ESADE Executive Education – Open, 7th in the World.
First homework: let’s analyse our product/market fit and market size! That should be easy, right? In the end, in Nelio we could simply say:
The market of Nelio A/B Testing is any WordPress website owner (personal or business) interested in improving it.
We also know some interesting WordPress statistics as the ones published by Tom Ever:
- There are more than 74,6 Million Sites that depend on WordPress
- this represents around the 23,9% of all websites in the world (source from W3Techs statistics)
- there are more than 37 million WordPress-related keywords per month
- WordPress.com gets more unique visitors than Amazon (US)
We can also take a look at the WordPress Popular Website Verticals published by BuiltWith
In fact, BuiltWith offers a 15,225.657 WordPress active sites report for downloading.
We can continue searching and searching more numbers related to WordPress. The truth is that all these figures are amazing! But, are they really meaningful for us?
As it turns out, determining our product/market fit and market size is not that easy. As part of this analysis, Lluís Vidal, one of the partners of Intelectium and one of our mentors, gave us very interesting readings that have been very useful for us:
- The Startup Pyramid by Sean Ellis
- Product/Market Fit by Marc Andreesen
- Market Size Hypothesis by Steve Blank
The Total Addressable Market (TAM), how big is the universe of WordPress, is a huge number. The fact is that this figure does not tell us much either. We want to measure our Served Available Market (SAM), how many can we reach with our sales channel and, the most important, our Target Market, who will be the most likely buyers.
After looking at plenty of reports and numbers (you can go crazy with all the information that is out there), we decided that instead of working from big to small, we could work the other way around. This is, by starting first with our most valuable current customers, we could then reach our Target Market.
To begin with, what follows is one of the exercises we’ve been working on:
- Around 35% of our current customers are Marketing & Web Design companies.
- Almost the 60% of our clients are from the US as shown in the figure below.
Most of them correspond to rapidly growing companies. This makes sense because these are companies particularly interested in innovation and continuosly looking for new marketing tools.
Therefore, taking into account that the US market represents more than half of our customers and it’s easier to find figures, we are first focusing in this market. One list that provides interesting information that may fit to the business profile we are looking for is the annual Inc. 5000 report. Every year, Inc. magazine ranks the 5,000 fastest-growing companies (privately held) in the United States. By looking at the more important traits of the CEO’s of these companies, described by Gallup in the Portrait of the Not-So-Average Inc. 500 CEO, we are quite confident that this profile corresponds to our target customer.
Let’s continue with our research: from the 5,000 companies listed in The 2014 Inc 5000, 453 companies correspond to the Advertising & Marketing Industry. This represents the 9,06% of all the companies and the second largest industry, after IT services (with 734 companies, 14,68%).
If we consider, as stated above, that the 23% of all websites around the world are in WordPress, is it right to say that around 105 have the website in WordPress? As we are a team with a strong IT background, we wanted to check the real numbers and here, below, we give you the results:
In fact, the total number of companies is 208. Almost the double of our initial supossition.
We are glad that some of them are already our customers, which reinforces the belief that we are in the good path to identify our target market.
I wanted to share with you the list, below, of the Advertising & Marketing companies:
Getting this list has been great for us and we want continue working with it. Therefore, on the coming weeks, we’ll continue publishing the list of WordPress usage of the Inc. 5000 on other industries. Sign up to be sure you don’t miss them.
Featured Image by Stéfan.