Identifying the Market for Your Business Idea

This article was authored by Jeanne Heydecker and originally published on the Woomentum network.

Okay so you have this great idea and you’ve validated that the market needs what you want to produce at a price point that enables you to make a profit.

Are you able to articulate the precise positioning of your solution? Now it is time to really double down on your competitor research. You want to know exactly who’s out there, what they offer, what they charge, how they’re paid, how they distribute (if applicable), how they market their product/service, and to whom. Look also at peripheral companies as well.

You need to do a lot of research on your competition. No investor wants to hear, “there’s no one in our space,” because it’s absolutely untrue. You just haven’t found them yet. Maybe they aren’t on line. Maybe they’re regional. Maybe they are in academia or the R&D department of a multinational with deep pockets. But, they may also be looking to expand/commercialize, and are seeking funding to take their financially solid, mature and proven product/service to a larger market. If the investor can name even one company in your space, you haven’t listed, you could easily blow your pitch up right there.

For example, maybe you have a cool new shoelace idea. Don’t look at just shoelace manufacturers, but sneakers and other shoe manufacturers. They may be able to sell your product for you as a high margin impulse purchase at their retail stores. Another example was when I was advising a client making high end computer-aided design software and hardware for the textile industry, and the price point was way too high for most people making printed fabrics, but I suggested looking at other manufacturers such as vinyl flooring, wallpapers, carpeting and other manufacturers of products that require large repeatable designs. This greatly expanded their market opportunity with large commercial manufacturers with big pockets that were in dire need of more modern design processes.

Examine the market and start segmenting who you think your customers will be, then expand your thinking beyond that – who else might be able to use your product if you just made this little tweak here or there? There’s more opportunities out there than you think. 🙂

What are you doing to identify your markets? What processes are you currently using? Any tips, tricks or suggestions you’d like to share? We only learn by sharing our experiences and I’d love to hear from you!

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