The Next Billion-Dollar Company Isn’t What You Think It Is: Church Tech, The Next Holy Grail In SaaS?
Americans are rapidly becoming less religious. Weekly church attendance is falling, congregations are getting smaller or even closing and the percentage of Americans identifying as “religiously unaffiliated” has spiked. Despite all this, now might be the perfect time for church tech companies to thrive.
Opportunities (and challenges) in Church Tech TechCrunch (July 2020)
Ad Tech, Fin Tech, Health Tech, Deep Tech… it seems that there is no shortage of a new technology revolutionizing a new industry. However, a new behemoth is set to be the next big-thing, Church Tech. Of course, there are already early-bird incumbents but one thing that history has taught us… it is all about execution.
The Catalyst
Months-ago when the world went into lockdown many people sought online-alternatives to the activities once consumed in-person. Congregating in-person at a church was not exempt to the lockdowns across the globe.
Figure 1 below highlights the spike of interest in March of 2020 around Google keyword searches related to “Virtual Churches.” Two things of interest here: 1) The initial spike highlights a need for a virtual offering; 2) The downward trend from March to April is attributable to searchers finding a church providing some kind of online offering. This means that there is both an appetite but also an unavoidable need for churches to provide an online offering with searchers settling into their new, online congregations.
Figure 1: “Virtual Church” Keyword Interest (Google Trends)
Not only are traditional churchgoers shifting to an online alternative, but there is also a new generation of churchgoer on the rise that will further drive a demand for an online church experience and church-like tools. What do I mean by that? According to a PEW Research study, Americans identifying as “spiritual” but not tying themselves to a specific denomination or religion is growing — check out Figure 2.
This is a sign of a few things — not to spoil The Opportunity discussed below: 1) The need for an online congregation platform servicing the location-unrestricted “spiritual” associated church-goers, 2) The demand for church-like tools.
Figure 2: % of US Adults Who Identify As Spiritual But Not Religious (PEW Research)
The Opportunity
Venture capital funding into U.S. religious and faith-based apps has tripled since 2015, surpassing $18 million last year, according to data from PitchBook and Crunchbase…[as] Covid-19 has upended the traditional Sunday service, taking sermons from the pulpit to the screen. It’s sparking a long overdue digital awakening for churches across the country and investors are taking notice.
Venture Funders Flock To Religious Apps as Churches Go Online Bloomberg (October 2020)
To say this opportunity is ripe for funding would be an understatement. VC appetite continues to grow for Church Tech, and obtaining funding to scale your SaaS is possible, take a look at Figure 3. The appetite is there, we now have to discuss just what to build.
Figure 3: Venture Capital Funding for Faith-based Has Surged Since 2015 (Bloomberg)
The Immediate Opportunity — What To Build?
A White-Label, Tiered Subscription, Online-Church SaaS: Squarespace for Churches?
If we take a look at the current eco-system within Church Tech, as captured in the fantastic visual by the early-stage, University focused, VC Fund Contrary Capital in Figure 4 below we can see many players in each vertical, from church management software to digital giving. Each company is focused on digitizing traditional in-person Church “things”, from digital tithing to Bible study.
Although great, it still leaves the non-technical Churches hanging, trying to piece together a great online experience for their congregation. Of course, opportunistic digital agencies are looking to cash-into this trend by charging astronomical fees.
Alternatively, free website builders like Faithlife Sites offer free landing-page style, drag-and-drop websites but that is not exhaustive enough nor serves the need of online gatherings. A quick sanity check with Google, searching for “Online Church Website Builder” shows the top few organic results (below the paid SEO results of your expected website builders WIX, Squarespace etc.) are just blogs or communities pointing to the very same paid SEO companies listed above (re: WIX, Squarespace etc.), an example being this very popular WordPress blog, WP Beginners article.
All that being said, there is an immediate opportunity to create an exhaustive, fully integrated SaaS for churches to connect with their congregation. Like any two-sided platform there needs to be a clear value proposition for both sides. The congregation gets access to the community, sermons, notes, groups, and essentially not missing a “virtual” beat.
While the church will have access to their revenue stream, online tithing of the community is their main income driver, as well as the unique opportunity to extend their network past physical restrictions of in-person gatherings to even the earlier defined “spiritual” churchgoer.
The SaaS should theoretically allow churches to drag-and-drop together their online, white-labelled platform to select the features they want to include. To note, as mentioned in the opening statement of this piece, there are a handful of companies who spun-off products like this, a perfect example is SnapPages. However, there is still a market and enough VC funding to go around.
Figure 4: The Church Tech Market (Contrary Capital)
The Niche Opportunities — What To Build?
Digitization, Augmented Reality.. thinking outside the box to create value.
A Blue Ocean Strategy is the “simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant.” (Blue Ocean Strategy) What does this have to do with Church Tech? Well, if we take this approach and layer it into the current Church Tech market we can start to think about how to best carve-out our own uncontested niche-like opportunity.
We can break it down into two categories: “Augment” and “Elevate”. Let us first start with “Augment”. When congregations are cleared to go back to in-person gatherings this presents a unique opportunity to augment the in-person experience as the congregation will be technology-primed from the online services.
“Augment” Brainstorm Kick-starter: Help better the community experience with an event-based app, similar to the highly popular EventMobi. Offering community note taking, polling, Q&A, forums and more.
The next bucket “Elevate” is centered around upgrading the current landscape of applications. Let’s take a look at Figure 5 below.
Figure 5: Top Religious Apps In the US In 2020 (Bloomberg, Apptopia)
If we take a look at this list, only two major categories come to light: 1) Online Bibles / Content; 2) Bible Study / Study Groups. Although functional, there is so much room for innovation here.
“Elevate” Brainstorm Kick-starter: Gamification for kids learning, Accountability tracker for Religious-based goals (similar to Stickk), MeetUp for Religious-based events (virtual or in-person).
However, if we want to step outside of the box, away from “Augement” and “Elevate” there is an aspirational opportunity…Augmented and / or Virutal Reality. It is no surprise that Figure 6 below highlights a dramatic jump in interest for “Augmented Reality” as many looked to replicate the in-person events they once attended. Creating an Augmented Reality experience for congregations to enjoy at the convenience of their couch, albeit aspirational, would be groundbreaking.
A Virtual Reality alternative is another avenue to explore, take a look at the Robloxian Christians, a Roblox based Christian gathering that meets every Sunday amassing thousands of virtual church-goers.
Figure 6: “Augmented Reality” Keyword Interest (Google Trends)
GTM & Execution
People don’t often talk about the last S in the acronym SaaS — Service. And, like most service-based industries going-to-market involves a lot of selling and marketing. Of course, behemoths have cleverly titled armies of “Account Executives” but for those who may not be so lucky this Stripe article may help.
Build It
But before we start to market our product, we have to build our product…or at least an MVP. Here are a few bootstrapped ways to go about doing just that:
· Prototype your MVP using FREE software like InVision, then look to find a technical co-founder or use the proof-of-concept to secure funding for dev. talent;
· No-code developer tools: webflow has curated a list to get you started, and companies like bubble are making building something great easier than ever.
Price It
Subscription based pricing models have swept the online SaaS landscape, and rightfully so. From a profitability standpoint, it makes more financial sense, for example, to charge $50 / year with an average customer life of 4 years against $100 for perpetual access.
Market It
This is an important step, leveraging paid-social you can decide down to the denomination and demographic of your target audience in which the ad will be served. Many articles could be, and are made on paid-social strategy but the folks over at AdEspresso by Hootsuite have some great beginner blogs that cover maximizing ROI, audience retargeting and much more.
And, as you rake in tons of cash, don’t forget to measure, this Hubspot blog outlines what metrics you should be tracking as you grow and scale.
Thanks for reading!
- Lucas
