Phil Sokowicz is the co-founder of a German legal tech startup. The company was designed to help people enforce their legal claims and focuses right now on the revocation of life insurances, to claim back a significant amount of money. There are currently millions of people in Germany with a faulty contract that might fit the bill.
This is the perfect example of a niche startup. The target market is large but highly specific. Since it’s conception in 2016, the company has been hugely successful. It’s a fantastic example of how finding a gap in the market is the first step in creating a successful startup.
What does the gap in the market mean?
Finding a gap in the market means finding a group of people that current businesses are not helping. Almost every successful business serves a gap in the market. This is because businesses only succeed when they attract customers – they only attract customers, when people need the product.
How can we take inspiration from Phil Sokowicz?
Many small startups make the mistake of beginning with an idea. However great the idea maybe, if it already exists, you will have a difficult time convincing customers of another business to switch to yours.
Sokowicz and his co-founder found a group of people with a problem and created a solution for them that didn’t exist before. They created a company that did the technical work to assist lawyers in checking the cancellation policies and entering all the legal proceedings for them.
How did they find this gap in the market?
The idea for the platform began with a legal case in his partner’s family. A life insurance policy was terminated but the payout was minimal. This led Sokowicz’ partner, to look further into other life insurance cancellation policies. What he discovered was a huge number of policies that, when revoked, could reward the policyholder with a lot of unforeseen money.
How to find your own gap in the market?
They stumbled upon the gap in the German life insurance market. If you don’t already know of a market gap, it can be hard trying to find one – if it were easy, someone else would have made the company already!
Here are some tips on finding a gap in your own market:
Choose an established market and look for small, specific gaps there:
You’ll need to know what marketplace you want to slot into. For instance, if you are interested in beginning a fashion business, look for small, specific gaps within this industry. Instead of starting a generalized women’s clothing business, cater to a group of underrepresented women in the marketplace.
Copy a successful business model with one or two significant improvements:
This is one of the easiest ways to find a small gap in the market. If there is a new business that you admire, see where their business model falls short, and fill in their gaps. Your company will immediately be more attractive to their customers.
Keep an eye out for trends:
Keep on top of trends in your industry. As new trends surface, new businesses catering to these trends are quick to follow. Do research on what is up and coming, and beat others to it.