Most people seem surprised to hear I am making a CRM application. Their usual response is in the lines of “But there are many CRM tools out there and they come in all flavours. What more do you have to offer?”.

I don’t understand why people think it’s a bad idea making something that already exists (crm, project management) when we have so many examples of this happening outside the IT field. Don’t food companies offer new chocolates or new milks all the time? Even well established companies offer new products that seem competitive to other products they make. And quite often, these products find their place in the market.

Of course things in real life are never so simple. A product’s market share is dependent on thousands of factors, but just because other products exist, doesn’t mean a new one is doomed.

Then there are other reasons to choose an existing market. This excellent article by Erik Sink analyses some in more detail. The main reasons are:

• It’s hard, if not impossible to create new markets.
• Competition can be beaten, if chosen carefully.
• There are unhappy buyers, even in saturated markets. It may be difficult to find out what these people want, but it can be done (targetting a niche of the market).

So for these reasons I strongly believe that entering a well-established market is the best thing for a company starting out.