“Rule No.7: Agree on Market Type. It Changes Everything.” (The Startup Owners Manual)
The Startup Owners Manual: The Step-by-Step Guide For Building A Great Company by Bob Dorf and Steve Blank is an insightful book below is a summary of Rule No.7.
- Bringing a new product into an existing market
- Bringing a new product into a new market
- Resegmenting a market as a:
- Low-cost entrant
- Niche entrant
- Cloning a business model that’s successful in another country
Questions for existing markets:
Does your product or service improve on a customer-defined attribute (faster, cheaper, better e.t.c.)?
How do the features of your product or service compare with competitors?
Questions for new markets:
Does a large enough customer base exist, and can they be persuaded to buy the new product or service?
* Don’t spend on sales and marketing funds yet.
Questions for resegmenting an existing market:
Are there customers at the low end of an existing market who will buy “good enough” performance at a sustainability lower price?
Would a segment of an existing market buy a new product designed to address more specific needs?
* Check out Blue Ocean Strategy by Renée Mauborgne and W. Chan Kim for more information on re-segmentation.
Questions for cloning an existing business model:
Has an existing business been proven in location A but not yet adopted in location B, that has a large local market, due to its unique domestic setting (language, culture e.t.c.)?