You have a vision and leadership skills, but if you allow yourself to become too focused on your idea you’ll underestimate the competition and find it hard to get off the startup blocks.
Today’s market is saturated with new technology-led solutions. The likelihood that your approach is so unique that there’s nothing similar out there is slim. Even if it is, you’ll still be disrupting an existing market and will have to deal with the incumbents.
Start by effectively identifying your target market and evaluating your access to that market. And when you’re going into a pitch, make sure you can reel off your competitors – because it’s a safe bet that any investor you’re pitching to will be able to.
Without further ado, here’s our take on the top metrics for market awareness:
When launching into any new venture the starting point is universal and infinitely important: research, research, research. Consider these questions: what primary and secondary research have you carried out to validate your market assumptions? What testing have you carried out? And has your research been thorough enough?
Bear in mind that, at some point along the road to entrepreneurial success, you’re going to have to stand up in front of a roomful of investors with a bulletproof proposition. Can you evidence your research? Has your research been relevant? And most importantly, what research would an investor want to see?
You think you know your niche and are confident that your product has a defensible and exciting USP. But have you considered the difference between the ‘global’ market and addressable market for your service? How have you established the size of your addressable market and what is the size of the market you are entering?
You’ll need to consider whether it’s big enough, who the competitors are (if any) and how large or established they are. You also don’t want to risk being too far ahead of the consumer knowledge curve: have innovative competitors educated the marketplace or will you need to educate the market? Is your product or service innovative enough to be disruptive or simply a curious novelty?
Last, but by no means least, you’ll need to analyse your potential consumer base and put yourself in the psychological shoes of your target customer. Is there a large enough consumer group for you to have a sustainable and growing business that will pay for your product or service? And who actually is your customer?
This is where a strong appreciation for demographics and consumer profiling comes in handy. You’ll need to identify your customer, forecast what they’re prepared to pay and, ideally, get face to face with them. Listen to your customer! This is where user testing, opinion polls and good old-fashioned product trials will pay dividends in the long term. Take these learnings and back-load them to prevent costly mistakes when you can least afford them.
Learn more – read our article on what investors look for in startups to find out what makes great founding teams.
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