In the first post in this series I looked at the extra barriers that face startups in selling a new product or service: Inertia, Limited Resources, Risk and Size. My previous post looked at the characteristics of a good market: Pain, Money, Access and Scale – the PMAS characteristics.
This post is going to look at how to find markets that match these criteria.
At Salient Point we find that the best way to identify solid market opportunities is to use a three stage iterative approach.
It starts with a Review of what is already known (or assumed) about potential markets. There are lots of different tools that can be used to drive this process in different ways, from old favourites like SWOT or Porters Forces through to newer tools like the Business Model Canvas. The key is to capture what you know (or assume) already.
Once you can see what you already know, it usually becomes apparent where the main gaps in your knowledge are. The next step is Develop a set of questions or hypotheses that target these gaps. What do you need to know? What do you think you know, but need to test out?
The third step in the approach is to Enquire. Questions can be answered through research by asking potential customers, industry experts, or reviewing existing data on markets. Hypotheses can be made concrete by drafting, for example, preliminary product literature or a website, and getting feedback from customers.
Salient Point is expert in leading this process for finding markets – we have used it to identify and characterise a wide range of markets including:
- £50m+ UK Consumer market
- £100m+ Global Industrial Market
- £100m entry niche in global $1bn Software market