week04 steps 01&02

Photo by Axion23 via Flickr (CC BY 2.0)

Conclusions

If you want to have a business you need a paying customer.

But we nee multiple paying customers.

We have to focus

Goals

Understand “Market segmentation”.

What is a beachhead market.

Why it's important to focus on one market.

You'll learn the model that will guide you through selecting your beachhead market.

Step 1: Market Segmentation

Photo by Danilo via flickrhttps://www.flickr.com/photos/yota/57167397

(CC BY-NC 2.0)

Target customer

Group of potential customers who share many characteristics and who would all have similar reasons to buy a particular product/service.

Common pitfalls

Selling to everyone.

China Syndrome(or fun with Excel).

By Elliot Brown via flickr (CC BY 2.0)

What is market segmentation?

Systematic categorization of potential markets for your idea.

Photo by Danilo via flickr (CC BY-NC 2.0)

1.Brainstorm

Identify potential industries.

Subdivide each industry into markets and market segments.

List people who might benefit from your idea.

Industry/Segment

End user

Application

Benefits

Lead Customers

Market Features

Partners/players

Market size

Competition

Needs

2. Narrow

1. Well funded?

2. Accessible?

3. Compelling reason to buy?

4. Can you deliver?

5. Competition?

6. Can you leverage it?

7. Consistent with your values and goals?

3. Primary market research

Go out of the building and talk to potential customers.

Goal: To learn from them.

“Customers don’t care about your solution.They care about their problems.”– Dave McClure, 500 Startups

By Instituto Siglo XXI via flickr (CC BY-SA 2,0)

Why? To understand your customer

… I am the target customer

But:

You are a data point of one.

Confirmation bias

Some guidance

Don’t introduce the product.

Understand the customer first.

Step 2: Select a Beachhead Market

By The US Army via flickr (CC BY 2.0)

Beachhead market

The first market youwill choose to pursue.

By The US Army via flickr (CC BY 2.0)

One, only one, market

Focus.

More markets, at this stage, reduces the odds of success.

How to choose?

1. Well funded?

2. Accesible?

3. Compelling reason to buy?

4. Can you deliver?

5. Competition?

6. Can you leverage it?

7. Consistent with your values and goals?

By viZZZual.com via flickr (cc BY 2.0)

Further segmentation is required until

1. Customers buy similar products.

2. Similar sales cycle, look for similar benefits.

3. “Word of mouth” between customers.

Useful tools

www.detoolbox.com

www.edvdesign.com

What to do nextIt's now time for you to:

• Open your mind. Empathy is needed.

• Interview prospective customers/end users for your idea (Try to interview at least 10).

• Segment your market (list potential segments).

• Narrow down your market opportunities

• Research in-depth.

• Choose a beachhead market.

• Segment beachhead market.