Investing in Niche Markets

Investing in Emerging Markets

3 minute read Investing in emerging markets can be an incredibly tempting venture.

The high risk/ high reward stakes are likely to draw in investors both big and small. So how do you choose? It is essential to analyze both the start-up and the industry they will be operating within.

The Industry

You can start by defining the niche space and reviewing the evolution thus far of the industry. It is also important to note current challenges in the market and potential future challenges and advancements.

The Startup

When analyzing the start-up, you should start by examining both the CEO and their team. What are their strengths, weaknesses, and past accomplishments?

Next, you should define the problem they are solving and how. You want to be sure they are solving the whole issue, and not only part of it.

Their idea must be protected so that other space players do not easily duplicate it.

Finally, you want to understand the future aspirations of the company. Are they prepared for upcoming challenges and advancements within the industry to ensure that they are fully prepared and equipped to keep up with the competition?

To better understand this process, we are going to look at a company in the MarTech space. We will briefly look at each component listed above to decide whether this is a company worth investing your money in.

The Space

MarTech, or “Marketing Technology”, refers to marketers’ tools and software to leverage, plan, execute, and track campaign efforts.

This technology is used to streamline the marketing process, including customer communications and data entry and analysis.

Industry Evolution

As the industry evolves, more companies are beginning to position themselves as all-in-one marketing solutions. Traction around areas like conversational chatbots, AI, influencers, and augmented reality is increasing.

However, overall growth in the segment will slow down. As companies consolidate, a lot of these point solutions will fall by the wayside.

Challenges

For early-stage companies, many of the challenges revolve around the way angels and VCs nurture the industry itself.

There tends to be a push towards point solutions and the next shiny new thing. In many cases, the problem is a lot broader, and these point solutions are pieces of the whole.

Investing

The MarTech space is no different than any other niche in that there are some great opportunities, and there are some to avoid. As an investor, it is important to closely analyze the team and the problem that the business is trying to solve.

The Company

The Company sees itself as an integrated, socially collaborative, intelligent marketing platform.

They are an all-in-one system that does social media marketing, content marketing, and email marketing.

The CEO realized that marketing in the digital age was becoming increasingly complex due to the overwhelming number of marketing channels, mechanisms, and customer touchpoints. He also noticed that many of the old marketing standbys in advertising had become less and less effective.

This inadequacy led him to create The Company.

Conclusion

Is The Company a smart investment move within the MarTech Space? They provide an all-encompassing solution, solving the whole problem and not just a part of it. The CEO has a successful track record at many reputable companies.

It sounds like they have thought about keeping their platform up to date and flexible to compete within the space. It would seem this is a company that is worth investing in, so long as they can show how they will retain customer loyalty and protect their innovative platforms and ideas from duplication by other players in the space.

If the company does not have a definite answer to these two potential problems, we would advise not to invest as this can quickly become a startup undoing.

Read more in our most recent eGuide: https://tencapital.group/investing-in-niche-markets/


Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

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