SmarkIt Value Story

It's a cold Saturday afternoon in December in Boston. Jane Doe, single mother of a teenage daughter and six year old son, decided to get some last-minute holiday shopping done. Jane's daughter is at cheerleading practice and there is nobody around to watch her son.

Jane decided she would head over to Newbury Street first. Knowing that parking is usually a nightmare in Boston, particularly the Newbury Street area on a weekend day around the holidays, Jane reached for her iPhone and opened the SmarkIt app. Luckily for Jane, Newbury Street is one of the pilot areas for SmarkIt's smart parking meters. In other words, the parking meters on Newbury Street are wirelessly connected to SmarkIt's servers and allow for advanced reservations at a small premium. Because these meters are tied into SmarkIt's servers, Jane can also see which spots are open and determine when any spots will become open.

To Jane's dismay, she discovered that all spots on Newbury Street were taken. However, she noticed that one of the spots right by her daughter's favorite clothing store was available for reservation in 45 minutes. Seeing that Jane was in no particular rush and lived 30 minutes from Newbury Street, she decided to pay the small premium and reserve her spot. Jane arrived five minutes into her reservation and her spot was waiting for her. Instead of having to walk a few blocks in the cold with her six year old son, she only had to walk less than a block.

Of course the store was packed and the lines were long. Jane underestimated the time she would need in this store and only reserved her spot for 30 minutes. With only five minutes remaining, SmarkIt sent Jane a notification with an option to extend her reservation. Luckily for her, nobody had reserved the spot and she was able to add 15 minutes to her reservation while waiting in line to check out. For only a few extra dollars, Jane was able to find and reserve a parking spot, avoid a far walk in in the cold weather with her young child, and extend her reservation to avoid getting a parking ticket.

SmarkIt's Market Sizing Approach

My team faced a unique challenge in determining our market size. We debated, on more than one occasion, whether we should be determining the market size of the end users (those who would download our application and use it to find parking) or whether we should determine the market size of available parking spots to implement our technology.

Originally, we were focusing our wedge-in on the city of Boston. In that case, we knew there are approximately 7,300 metered parking spots. We were focusing our initial efforts on determining the market size of end users in this case. However, after a few deliberations, we pivoted and shifted our focus to cities that fit a particular description. In this case, we also shifted our market sizing focus to the municipalities that fit our criteria (cities on the east coast with a population between 100,000 and 750,000 that have metered on-street parking). We will also need to of course do some estimates on an end user market but this will be municipality-specific.

All of that being said, our market sizing approach weighs heavily on a combination of demand and targeted selection of winnable market opportunities. The competition will also of course come into play when municipalities decide whether to implement our technology or choose a different method of upgrading existing metered parking. Of course, residents of cities who do not own cars (think students and young professionals that use public transportation) would not be included, but just about anyone else who has a reason to drive into one of our targeted municipalities would be included in our market size.

The true demand of our product is based on the usage rates of the metered parking spots. Cities without a true "parking problem" will not truly have a demand for our product. On the other hand, cities like Boston would present great demand for SmarkIt.

I should let it be known that our market sizing is based on our initial target market. If steady growth and successful implementations are achieved, then there is no reason to not branch out to all cities with metered parking and a true "parking problem".  

Can a Company Survive on Inbound Marketing?

You may likely already know my stance on this from the numerous comments I have made on inbound marketing during Saturday classes and my comments on the HubSport discussion board. While I think it is necessary for a company to implement inbound marketing, I find it difficult for a company to thrive on inbound marketing alone. Notice I said "thrive" and not "survive". 

In my opinion, inbound marketing is great for lean startup. Even for those not adept with social media or blogging, it is fairly easy to setup a Facebook and Twitter account and there are plenty of articles and tutorials on how to effectively use these kinds of tools for marketing purposes. Of course, things like Search Engine Optimization (SEO) likely require a hired consultant and will present a decent upfront cost. Maintaining a social media presence and blogging however should not require much more than a part-time college student. It blows my mind to see companies paying upwards of $75,000 a year to hire someone to manage social media. 

Some mature companies can scale back on outbound and rely more on inbound marketing, but that is due mostly in part to their reputation. Apple is a good example. While they still spend a considerable amount on outbound marketing, Apple has the benefit of an army of unpaid sales staff who dedicate their free times to blogging about Apple's products. Without Apple's reputation however, I would bet they focused more on an outbound strategy. 

One issue I see with inbound marketing is the reliance on people actually looking for your product. The absence of outbound marketing significantly reduces the market size because one can no longer reach those not specifically looking for their product. Losing this customer base results in a loss of impulse purchases that occur due to a successful outbound campaign.