#2: Transistor.fm’s co-founder, Justin Jackson, talks through a recent realization on how easy it is to conflate an audience with a market (‘a group of people that buys X’); how one could do with/without the former, not the latter. (Source)
I think now if you’re starting a business, the market is the most important thing. And when I say market, I don’t mean just an identifiable group of people. I’m talking about a group of people that buys X. So the diamond market last year was 4.5 billion or something like that.
That’s where you can see people, preferably buying something. Just people in motion, doing something. And everything kind of hinges on that. Which market you’re in.
As an example, Taylor Otwell is the founder of Laravel, which is the most popular PHP programming framework in the world.
He has a huge audience if you look at his audience on Twitter, he’s got, I don’t know, hundreds of thousands of followers. He has 82,000 followers on Twitter.
For a lot of people that’ll be a big audience. If you got to Laracon, you’ll see he’s got a big audience. You’ve got tons of people buying his stuff.
He has millions of people using Laravel. But all of that is in the context of a bigger market. It’s hard to count the number of programmers in the world.
But let’s just say as a reasonable estimate there’s five million PHP programmers in the world.
And so 5 million PHP programmers in the world. Let’s just take one element of that market. Not including all the tools they buy, not including everything else that you need to be a programmer.
Let’s just think about salary. And these are just guesses. Let’s say on average, an average PHP programmer in the world makes $25K a year. Well, 25K times 5 million is a $125 billion, I think.
That’s a 125 billion being spent on salaries for PHP developers alone. That’s a massive market. It’s not just a big group of people. It’s also a big group where there’s some sort of economic activity being generated.
I think it’s why products in the Laravel community often have a magnified impact compared to other things. So I have a course called Marketing for Developers that did pretty good.
But that’s like, if you take all of the developers in the world and ask how many of them want to learn marketing, it’s a much smaller slice, right?
How many PHP developers want to make their jobs better? Well, that’s probably 5 million. And so, you can compare results and see how everything hinges on the market.
How big your audience can be within that market, and then all the multiples of all kind depend on that. How much money is being spent on that market already, how much of that can you carve off for yourself.
Taylor, presumably, has only carved off a little bit of the PHP market. There are still other frameworks. There are still programmers that don’t know about or use Laravel… Even then, Taylor Otwell as a solo-person has sold $10 million worth of software to PHP developers. That’s insane.
…It’s not enough to just be in a good market. You have to be interested in that market. You have to have good founder-market fit. You know, you have to, then, be able to identify some sort of need in that market.
Then you have to actually execute on some things and you know make some sort of connection. I don’t think you have to necessarily build an audience. But you get a lot of leverage from who you know and who knows you.
Who you know is just making connections, we’re making connections right now. That’s networking…
Who knows you is the audience effect. That could be very helpful. But there are people who have built businesses without doing that…I think it’s just one of the levers you can use.