Building in and for the right market changes everything

[searching1god]

For my work I've been diving deep into the data behind HubSpot's App Marketplace to explore new product opportunities and the numbers are surprising.

2024 HubSpot App Marketplace $ Numbers for Indie Publishers

In 2024, HubSpot's app marketplace is generating about $70 million per month for third-party publishers across just 1,251 paid products – on average, that works out to $56k MRR per product. Of course, like any market, there are outliers that pull these average numbers up, and some products are produced by large publishers with strong tailwinds outside of HubSpot that help drive their adoption.

But the vast majority of products are produced by independent publishers, many of whom are creating significant revenue in a relatively low-competition environment.

It's a place with many of the ingredients indie builders need to create high-value products that can largely sell themselves –

• With over 194k customers, HubSpot's user base is massive. It's a premium-priced platform that serves high-value, recurring business problems for well-funded marketing and sales teams. Their marketplace is well-designed and provides a great acquisition channel with massive tailwinds.
• HubSpot charges no listing or transaction fees and the marketplace has relatively low competition and is still for new entrants.

Here's where it gets interesting for indie builders and small teams:

When we look at the indie products in the middle of the pack and a bit above average (trimming the top 20% of outliers that pull averages up), independent publishers are pulling in an average of $23.4k MRR ($281k ARR) from about 150 customers.

Many of these products are simple, solving one problem well, and require minimal support.

I've put together a more detailed, interactive version of this data here - if you want to dig deeper into the numbers.

IMO, building a product isn't really the issue (especially now). Understanding customers is critical, but understanding which market to build for first - and where to build within it - is vital to finding the tailwinds it takes to succeed as solopreneur or small team.

 

[jenny404]

@searching1god What led you to do this research? how are you estimating MRR?

 

[searching1god]

@jenny404

What led you to do this research?

I've always found that marketplaces for healthy platforms can help smaller publishers have a lot more leverage for creating and capturing value - by riding tailwinds of platform, and making it more valuable to its user base.

B2B platforms/marketplaces are the ideal examples of this since they usually are much premium-priced and serve more valuable, recurring business problems for customers with healthy budgets - allowing products that extend them to be higher priced as well.

HubSpot initially caught my eye because it checked most of those boxes, but additionally it had a very well executed marketplace that they seem to do a great job pushing traffic to from their platform, making it a stronger marketing/acquisition channel for the products there.

Because I'm a data nerd, along with being a product/business nerd, I wanted to get a clearer picture of how much value the marketplace was actually creating for smaller publishers, and were customer demand and value seemed to be the highest, based on real-world sales.

How are you estimating MRR?

We are able to determine the current number of installs for each product - but, we can't tell exactly how these installs are distributed across plans if there are more than one.

And products can have plans that are free, monthly, monthly with an annual commitment discount, annual, one-time fee, metered, or the lovely 'contact us'

The estimated MRR is determined by 1) doing a lot of math across the different plan types to reduce each to an effective monthly cost when the data supports it (which it does in most cases) and 2) making some conservative assumptions for how total installs are distributed across any available plans. We do this from least expensive plan (per month) and up, with each plan receiving a significantly smaller share of installs (you can see full #s for assumptions made here - https://claytonfarr.observablehq.cl...y-the-numbers/#revenue-estimation-assumptions )

Hope this helps!

 

[jenny404]

@searching1god Wonderful, thanks for explaining! What other marketplaces behave same ? Have you / will you look at Salesforce marketplace?

 

[searching1god]

@jenny404 You bet. Definitely have an eye on SalesForce and would like to do similar research and analysis of its ecosystem, products, and potential for indie publishers.