The No Cap Newsletter (012)
A bi-weekly newsletter ran by the RippleX Fellowship, covering key program learnings, industry news, and fellow spotlights.
🚨 RIPPLEX FELLOWSHIP SPRING 2022 RECRUITMENT 🚨
The RippleX Fellowship program is now recruiting for the Spring 2022 cohort. Join our community of fellow founders and aspiring venture capitalists, learning about the intricacies of company building and venture capital through hands-on workshops and discussions.
Applications are due April 8th EST.
↕️ Top-Down Analysis
When it comes to conducting market research, there are various techniques that can be used and all of which consider various factors to arrive at a similar end result. So which technique should you use to better understand your market? Better yet, let’s dive into a common approach that starts off with the big picture.
What is a top-down analysis?
A high-level view on how large a market is, or could be.
You’ve probably seen this type of analysis in IBIS
Reports: “the marketing software industry is $XB”
Investors typically look for billion-dollar markets to invest in (or else it’s too hard to get significant traction)
How do you calculate top-down market sizes?
You can find reports of a “total market spend” in a certain industry, but it’s often vague on how they calculate it and where they get their data from.
Then, you dissect that large number into what’s relevant to your company.
Geographic expansion: what other geographies can you sell to?
Pricing/upsell potential: how can you expand these budgets, tap into others, or increase your price?
Market growth: is the customer base you’re going after growing?
Expansion to other verticals: what other industries could you sell this into? other departments?
Let’s say you’re building a tomato delivery business in the United States.
The average household spends $751 on fruits and vegetables every year, for a total of $94.4B spend every year in the US.
About 30% of the population (according to the CES) lives in large cities so we’ll assume only 30% of those sales can be served. That reduces our estimate to $28.3B.
Also, not all of the fruits and vegetables that are purchased are tomatoes! According to the USDA, only 5% are tomatoes. That reduces our estimate to $1.4B.
Of course, not everyone will order their tomatoes on demand! Supermarkets will always have some market share, so we will assume that 20% of households would order their tomatoes on demand if offered. This brings us to $140M.
Finally, our business model assumes consumers will buy more tomatoes when they are delivered straight to your door! Our expectation is to grow tomato consumption by 10%. This increases our estimate to $154M.
The lesson doesn’t stop here, there’s much more to cover! Take a peek into our course accessible to anyone and everyone:
🆔 ENS vs. DNS
The value of certain elements in Web 3 is difficult to grasp fully right away. We believe that by comparing new Web 3 technology and features to ones in Web 2, we can draw better comparisons, and in turn understand the value proposition of the features people are building in the Web 3 space.
We’ll explore naming systems across Web 2 and Web 3, more specifically ENS and DNS. This new Web 2 vs Web 3 series breaks down the similarities, differences, and impact of similar technologies across Web 2 and Web 3. Ever wondered why everyone on Twitter has a .eth username? Let’s talk about it.
The current domain naming system we use for everyday websites like Facebook or Google is called DNS. Whether you know it or not, everything on the internet has an IP address, from your laptop to the server that hosts information for your favorite website.
For example, the IP address of your laptop could be 126.96.36.199 and the IP address of Netflix’s servers might be 188.8.131.52. Your laptop and Netflix’s servers need to know each other’s IP addresses to communicate and share/send information, which is how you’re able to enjoy thousands of shows and movies from your laptop!
Crypto has a very similar problem and solution that’s aiming to improve the experience of being an early crypto user, much like what DNS did for Web 2.
In the world of crypto, everyone has a wallet address. Addresses can belong to individual wallets of users like you and me, or they can belong to a company. Addresses look like this “e32fre43f584bnf2784b3”, which is quite hard to type into your laptop or phone, let alone remember.
That’s where ENS comes in, the Web3 version of DNS. ENS stands for Ethereum Naming Service, and it helps make crypto addresses on the Ethereum Blockchain a lot easier to remember and type. Instead of remembering that your crypto address is “fn438fb4873bf”, you can instead buy the ENS domain “john.eth” and type that in instead.
Why this matters
Comparing DNS and ENS is important as it lets us see how important naming services are when it comes to adopting new technology. No one wants to remember an IP address or an alphanumerical crypto wallet address.
Interested to learn more and possibly start creating your own ENS? This was only a taste of the full article and it’s available here.
💡 Fellow Spotlight
As a student, you may relate to the struggles of feeling overwhelmed, stressed and unclear about the pathways to support available as you navigate your post-secondary education. The tough reality is that this trend is very common among students and campuses all across the world. However, imagine if a solution existed with their sole mission to create a more self-aware, resilient, and connected campus.
We’re excited to introduce Eve Staszczyszyn, Co-founder of Compass from cohort #5.
Sitting at the intersection of education and wellness technology, this platform serves as a holistic student life solution supporting post-secondary students with access to resources, services, and events driven by personalized recommendations. This is followed by actionable insights directed to post-secondary institutions that aim to optimize their existing systems.
Backed by NEXT36, Queens Centre for Advanced Computing, League of Innovators, and the uOttawa Entrepreneurship Hub, this platform has reached thousands of students and branched across various universities in Canada.
Interested in being featured? Looking to share exciting news? Please reach out to Turja at email@example.com.
Authored by Turja Chowdhury (Cohort #9).