“Some people are just visionaries and they’re able to come up with new ideas like the next Amazon.com or maybe Bright Health or whatever that can totally disrupt the market,” said Mary MacCarthy, a Twin Cities based Marketing and Project Management Consultant. “But for the majority of us, we’re not quite that much of a visionary. Maybe the product that we’re coming up with is just an incremental improvement over what’s currently out there.”
For those of us not creating the next Uber, it’s in our best interest to thoroughly understand if our product or service could support a sustainable business. This involves executing some market analysis to understand product potential.
MacCarthy, an entrepreneur herself, has performed strategic marketing and consulting services for several major players including Medtronic, Cardiovascular Systems, and 3M Health Care.
“I’ve made so many mistakes in the past. So, I really want to just hand along that information so that people don’t go through the pain that I went through in launching their startup,” she explained.
When MacCarthy was building her company, she says she spent too much time behind a desk working on a business plan and not enough time with “boots on the ground” trying to sell to customers right away and figuring out what they actually wanted to purchase. She instead suggests performing a lean market assessment to obtain answers to strategic questions. This helps for informed decision making to move the business forward.
“Generally, you want to spend a proportional amount of time doing your market assessment as you have to amount of risk you’ve got going in,” MacCarthy explained.
If you are going all in with a large portion of your savings on the line, spend a bit more time on your market assessment. But if you’re not taking as much risk, you don’t have as much to lose.
Identifying a target market is one key component to the lean market assessment.
“You have to know exactly who you’re going after,” MacCarthy explained.
This includes understanding the geography of that target market, the demographics of the decision makers, and comprehending who will influence the ultimate success of the product.
Identifying drivers of satisfaction and dissatisfaction in the market is another essential piece of lean market assessment. This includes understanding what satisfies key decision makers in the market and what factors go beyond satisfying them. This process involves comprehending how each of your competitive offerings compare along each of these ‘satisfiers’ and ‘dissatisfiers’, which is also key for marketing and sales of the product.
Market sizing and primary and secondary market research are additional pieces of the lean market assessment puzzle.
“You don’t need to spend hundreds of thousands of dollars on market research to answer every question,” MacCarthy explained.
Entrepreneurs need to identify their competitors and understand what they are doing in the market. But a lot of this information can be obtained right from a laptop. This data is essential when speaking with investors but is frequently left out of fundraising pitches.
[See what MacCarthy has to say about perfecting a fundraising pitch.]
“You need to at least show the investors that you know who your competitors are and what their weak points are, and then how to apply your offerings to meet those needs and alleviate those 'dissatisfiers',” said MacCarthy.
Join Mary MacCarthy to learn more about market assessment next Tuesday at her Market Assessment 101 Expert Series at Collider Coworking.