One of the trickiest things about starting a company is getting an accurate read on demand. When sailors need help figuring out which way the winds are blowing, they rely on tell-tales – strips of fabric that flutter from the rigging. Here’s how entrepreneurs can read the tell-tales specific to their businesses.
Is there a wind at all? Entrepreneurs are constantly exhorted to talk to customers, and potential customers, to define a market need. Yet figuring out the best way to do that is often quite a puzzle! The first key is to focus on the potential customers’ point(s) of pain: What can’t they do that they need to? Why not? What is the impact?
Don’t ask your would-be customers how they would solve their problems. Instead, try to thoroughly understand their pain points, and then use your expertise to invent a novel solution. Our target customers were immunology researchers. They desperately need access to a tool called a flow cytometer or they couldn’t do their research. However, the instruments available were far too expensive for most individual lab budgets. Trying to use a flow cytometer owned by a shared lab was fraught with expense and problems. It was an opportunity in the making: massive pain affecting the core of immunologists’ careers, every day. The solution? A powerful, easy-to-use, affordable flow cytometer.
Is it a strong wind, or just a breeze? Once you have identified a problem, you must test how big a deal it is. The problem the innovator seeks must be big enough and irritating enough to support your business, and something critical to the success of your potential customer. To figure out if you are dealing with a strong wind or just a breeze, look for strong positive reactions from your potential customers. For us, the tell-tales that we had a strong opportunity were reactions such as “Oh, you have got to do this! How can I help?,” “Please, please don’t leave me out!” and “How soon can I get one?” If the reaction is “That sounds nice,” then your wind isn’t strong enough.
Is it a good wind? A strong value proposition will be essential to your future sales. Find the root causes of the customer’s pain so you can understand the consequences and potential benefits of solving their problem.
Finding a robust market opportunity requires creative reading of the market winds. The strong winds are those that inspire potential customers to help you and keep in touch, so they can be first in line when your product is ready. Those are the opportunities that will open pocketbooks.