The budget that tells you the market is real.

Getting Started · 4 min read

A client came to a meeting with a screenshot. She'd found a competitor app. It was doing roughly the same thing she wanted to build, but in a narrower category. She'd pulled its revenue data from a public analytics tool. Six figures a year. No paid ads. No social media marketing. Just organic downloads from the App Store.

Her first reaction was panic. "Someone's already done it."

My reaction was the opposite. "Someone's already proven it works."

Revenue is the best validation

You can run surveys. You can interview potential users. You can do all the research in the world. But nothing validates a market like someone already making money in it. If a competitor is generating real revenue, that tells you three things. People have the problem. People are willing to pay to solve it. And the market is big enough to support at least one business.

That last point is important. A lot of app ideas sound good in theory but exist in markets too small to sustain a business. When you find a competitor generating six figures, you're not looking at a threat. You're looking at proof that the economics work.

Zero marketing spend is even better

The fact that this competitor wasn't running ads was the most interesting part. It meant people were actively searching for a solution. They weren't being targeted or persuaded. They were going to the App Store, typing in a keyword, and downloading the first thing that looked right.

That's organic demand. The kind of demand you can't manufacture. If people are already looking for what you're building, your job isn't to create demand. It's to show up with a better product when they search. That's a very different (and much cheaper) marketing problem than trying to convince people they have a problem they don't know about yet.

What to do when you find a competitor making money

Download the app. Use it properly. Don't just screenshot the screens. Actually go through the flows. Find out where it's good and where it falls short. Read the one-star reviews. That's where your opportunity lives. The complaints people have about the existing app are your feature list for version one.

Then ask yourself: what does my version do differently? It might be broader (they only do one category, you do several). It might be deeper (they do the basics, you do the whole workflow). It might be better designed. It might just be positioned for a different audience. You don't need to be better at everything. You need to be better at one thing that matters to your users.

Finding a competitor making real money isn't the end of your idea. It's the beginning of your business case.

Related blog posts:

How to validate your app idea →

Your competitor's app doesn't matter as much as you think →

What if nobody downloads it? →