How mobile experts discover great app ideas that don’t exist
By Mike Sonders
In this post, we’re going to reveal how to use competitive intelligence to discover and validate underserved markets that you can profitably target with great app ideas that don’t exist.
An underserved market is one where a sizable number of people have needs or problems that aren’t being addressed by the current set of available solutions.
There are several ways in which a market can be underserved by a set of products or services. To name a few: price (too expensive for some groups?), design (too difficult to use for some people?), and features (doesn’t have the abilities some groups need).
Today we’re specifically focusing on a way in which many products exclude or underserve certain populations: demographic targeting.
In lots of consumer-facing industries, the leading solution fails to cater to the specific needs of at least one population characterized by age, race, income, location, education, or other shared demographic characteristics.
When an underserved group with pent-up demand also has a high willingness and ability to pay for solutions, you’ve got a highly-attractive niche market for a new business. In fact, just looking at the dating website industry (for illustrative purposes), we can find plenty of examples of products built to target specific demographic niches:
- Age: SeniorPeopleMeet, OurTime
- Religion: Jdate, Christian Mingle
- Education: DateMySchool, EliteSingles
- Income: SeekingMillionaire
- Location: FarmersOnly
- Political affiliation: Bernie Singles
- Sexual orientation: GayDar, PlanetRomeo
- Hobbies: SoulGeek, Tastebuds
…and the list goes on.
By analyzing the user demographics of apps in your target industry, you can identify the profitable opportunities to cater to underserved populations who are just waitingto install an app that serves their specific needs.
How to discover great app ideas that don’t exist using app demographics data
Start with large, proven markets
The key first step in this exercise to uncover great app ideas is targeting an industry vertical with a large, proven market.
You’ll know the market is large and proven when there are at least a couple (preferably more) long-established apps competing in the space, with the top-performing apps enjoying lots of active users.
Top consumer-facing apps have millions of monthly active users (MAU). Top-performing B2B or Enterprise apps generally have far fewer active users, but their average revenue-per-user rates are much higher.
The top consumer apps have millions of monthly active users (MAU)
The plan isn’t to compete directly against these entrenched, likely-deep-pocketed apps. Rather, you’re using them to identify markets where the demand is large enough to justify going after a subset (or underserved niche) of the market.
In the next section, we’ll discuss how tools like SurveyMonkey Intelligence can help you identify the competitors in an app vertical and discover their active user numbers.
Identify the competitor apps in the market
Familiarize yourself with the competitive landscape of the vertical that you’re targeting; identify the main competitors in the space.
SurveyMonkey Intelligence provides lists of app competitors for over 30 different app verticals. Everything from Beauty Products and Calorie Counters to Streaming Music and Work Productivity.
Sign up for a 14 day free trial to SurveyMonkey Intelligence to access demographic insights like these for thousands of iOS and Android apps.
The image below shows an excerpt of the apps that appear in the Dating vertical. (For the sake of example, we’ll focus on the dating app vertical in this post.)
Excerpt of some of the apps listed in the Dating industry vertical on SurveyMonkey Intelligence
SurveyMonkey Intelligence’s industry verticals feature allows you to see curated lists of highly-related apps grouped under more-granular topics than you’d find in the app stores. (For instance, dating apps in the iOS App Store are lumped into the Social Networking category along with communication apps like Skype and Whatsapp and social platforms like Facebook and Twitter.)
Conveniently, SurveyMonkey Intelligence provides the monthly active user data for each app listed in each industry vertical.
In this case, we see that Tinder is the top-performing dating app–with 5.4 million monthly active users in the U.S. as of September 12, 2016–followed closely by Plenty of Fish (POF).
Given the 25+ apps listed in the dating vertical and ~10 apps with 1 million or more monthly active users, we can safely say this is a proven, sizable market with plenty of demand.
Which leads to the next question: Are there underserved demographic groups not directly addressed by the existing apps in this vertical?
In the next section, we’re going to find out using competitive intelligence from SurveyMonkey Intelligence to uncover the user demographics of these apps.
Analyze the user demographics of the competitor apps
To give yourself the confidence that you’re targeting a truly underserved niche audience, you should familiarize yourself with the target demographics of most of the competitors in a given target market.
But for the sake of simplicity and expediency in this exercise, we’re just going to analyze the demographics of the top app in the example market: Tinder.
Using demographic reports from SurveyMonkey Intelligence, we see that the average persona of Tinder users in the U.S. presents several possible niche target markets: women, Baby Boomers, senior citizens, people with college degrees, affluent people, and non-white groups of people.
Let’s dive into Tinder’s demographics to begin to validate some of these possible underserved groups.
Uncover the underserved app demographics
As we’re analyzing the user demographics of apps in a target vertical, we’re specifically looking for groups that are sizable among the population of smartphone users (and can therefore justify launching a business to serve them) but are noticeably under-represented among users of the apps.
So, a thorough exercise would involve analyzing most if not all of the apps in a given vertical, but–for the sake of straightforward example–we’re acting in this exercise as if Tinder is both the top-performing and only competitor in the dating app market.
The following Tinder demographics come directly from SurveyMonkey Intelligence demographic reports.
There are slightly more women than men in the United States, so the gender composition of Tinder users definitely isn’t representative.
Is there something about the implicit “casual hookup” brand positioning of Tinder that some women find off-putting? Perhaps there’s an opportunity for an enterprising app developer to do user research to find out what would make swipe-style dating apps more appealing to women.
Tinder’s audience is dominated by Millennials. Baby Boomers and especially seniors must do a lot of left-swiping in Tinder in their quests to find people to relate to.
This definitely points to a possible opportunity to target older audiences with a niche dating app. Do any great dating apps exist for seniors?
Many more people in the U.S. have high school degrees than college degrees. So, the educational demographics of Tinder’s users seem generally representative of the population.
Nevertheless, a product that caters to everyone can’t do a great job at catering to the specific interests or needs of any one particular niche audience. There could still be an opportunity here to target a college population, for example, with an app that is designed specifically for them.
Regarding the grad student population: Recall that the most attractive underserved markets for a potential business are ones that have both a willingness and ability to pay for solutions. Grad students–given their low (if not non-existent) salaries and highly-demanding schedules–likely have low willingness and ability to pay in terms of both time and money when it comes to dating apps. They don’t stand out as an ideal target audience.
Again, Tinder’s users generally reflect the population of the U.S. when it comes to income; as you move up the pay scale, there are progressively fewer people.
That said, affluent people generally have high willingness and ability to pay for solutions. It’s definitely worth exploring a premium dating app targeted to that income demographic. (There’s a whole world of great app ideas that don’t exist for affluent users.)
Over time, younger generations have become much more accepting of interracial relationships, yet most Americans still marry within their own race. Non-white users certainly have a difficult time finding others from their ethnic or racial background on Twitter.
This presents an obvious opportunity to build dating apps that cater to African Americans, Hispanic Americans, and Asian Americans, and other sizable non-white populations who prefer to date and marry people with similar backgrounds, including racial heritage.
Cities are home to 67% of the U.S. population, so Tinder’s population disproportionately favors urban-dwelling singles.
But before jumping to the conclusion that rural singles are an attractive underserved target for a dating app, ask yourself: How big is this population? Is it more difficult to match singles in rural areas due to lower-density populations? How difficult is it to market apps to this population?
In other words, don’t just take the new insights you’ve gleaned from competitive demographic insights and start building an app. Do your due diligence and validate the possible underserved markets you’ve identified.
Validate your target underserved market
Think you’ve found a great idea for an app that doesn’t already exist? Before you sink a lot of time and money into building an app that turns out to be the wrong app for the underserved demographic market you’ve identified, make sure:
- The target population wants to–and is able to–buy what you’re selling.
- You know what to sell them (e.g., features, design, brand positioning)
- You know how to sell it to them (e.g., marketing channels, copy/language).
In other words, make sure you validate the market before you start building.
So what does validating a product idea involve? User research. Talking to the people from the underserved demographic groups you’ve identified and asking them revealing questions, like:
- How did you learn about the app you currently use?
- What made you decide to try it out?
- What do you love about the app?
- What’s one thing about the app that you wish you’d never have to deal with again?
- Who would you recommend this app to?
In fact, there are lots of great user research questions, techniques, and tactics you can use to validate a product idea and target market that have already been covered elsewhere. Here’re some useful resources:
- The startup framework to validate your idea before you spend $1
- 80/20 Validation: The Cheap and Fast Way to Prove a Business
- The Ultimate List of Customer Development Questions
Get free demographic insights on thousands of mobile apps
Ready to find great app ideas that doesn’t exist? You can access all of the demographic information you’ve seen in this post–gender, age, income, education, ethnicity, location, and more–for thousands of iOS and Android apps using SurveyMonkey Intelligence.
Our free 14-day trial makes it no-risk to explore our app data and identify attractive underserved markets for your next app venture.
This post originally appeared on September 27, 2016 on the blog of SurveyMonkey Intelligence, a provider of competitive intelligence for the mobile app industry.