Earlier this month, I attended a seminar on New Venture Creation: ‘Three Steps to Test and Validate Any Market Opportunity.’ (Co-presented by The Icehouse and SODA (Hamilton, NZ) . Both businesses incubating organisations focus on supporting start-ups with business growth programs.)
The seminar was delivered by invited speaker Dr. Rob Adams, an experienced entrepreneur, active investor, author, strategy consultant, and on the faculty of the Management Department at the University of Texas: http://drrobadams.com/
Dr Adam has written a book “If you build it, will they come?” It explains how to quickly gather information on competitors, directly interview members of your target market, and figure out what the market really wants to buy, versus what customers say they want.
- The steps to quickly understand the viability of your market
- Where to go to gather the information needed to hit the market requirements
- How to follow through with the right product launched in the right way
More than sixty five percent of new products are commercial failures, and if you compound this with a recession, now more than ever you can’t afford to be wrong. In If You Build It Will They Come, business professor and strategy consultant Rob Adams shows you how to make sure you hit your target market before you spend a lot of money. He shows you the fast, systematic and proven approach of performing Market Validation in advance of making a large product investment.
Market validation to size economic potential, growth and trends.
Dr Adams defined market validation as a ‘Process applied to unstructured serendipitous task of doing a complete evaluation of market for a product, before it is built.’
“The benefits of Market Validation are compelling, straightforward, and ultimately based on economics. Most companies follow a Ready, Fire, Fire, Fire, Aim approach to delivering their products or services. They develop the product they think the market wants and then ship it; it under performs, so the company scrambles to fix it and then probably goes through the same build-ship, build-ship process multiple times until they run out of money or randomly hit a market need.”
Adams, Rob (2010-03-09). If You Build It Will They Come: Three Steps to Test and Validate Any Market Opportunity (pp. 15-16). Wiley. Kindle Edition.
In the half day session, I strike a chord with me that marketing is a fundamental business process that should be considered before a product is developed or improved upon. Market Validation provides a systematic way to evaluate the market opportunity before the investments are made in designing, building, and launching the product or service.
Often, the innovator or product develops a new “better, more cost effective product’, before they actively profile who their end consumers are.
I’ve starting reading on Dr Adam’s book for continuous learning and scoping techniques to uncover market trends and unmet demands. It enhances the framework I could use to provide objective and realistic assessment of market potential. Complimenting with overall strategy to launch and market for and my clients.
If you are already successful in business and marketing of your product…
- When was the last time a survey conducted to collect customer feedback, data that helps you make better, more informed decisions?
- How do you decide on which product model, brand or service to further develop, enhance and innovate?
- Do you truly understand the entire customer experience?
- Does your appointed reseller, distributor or agent communicate with desired level of interest to international buyers?
- How do you currently motivate them?
If you have a new idea, cool and interesting feature of a new product…
- How can you uncover market demand and use that your advantage?
- What issues is your new product solving?
- Who are your consumers who are be excited and happy to buy and pay in advance?
- How are you going to reach them?
Here is a summary of the learning from that I got out of attending Dr Adam’s seminar:
Increase market success by:
- Focusing on what the ‘industry pain’, user problem and market related issues
- Treat marketing and engineering as equivalent , not opposing functions
- Surveying market growth opportunities and trends, prior product and service development
- Use quantifiable prospects (100 as sample recommended), develop fact based data, based on consumer data
- Size market growth with rate of economy growth
- Consider cost of acquisition of new users vs cost of existing brand users
- Pricing strategy with sound research from
- What are current substitutes, typical sales, profit and R&D margins.
- Pricing your product based on value delivered and overall brand experience
Other provocative learning:
- Only 3% of new businesses ventures succeed (global statistics: Medical and Technology as highest)
- Fail faster and move on to next best market and product for success.
- Define market research with a set of quantifiable assessments and data points.
- Reduce risk and maximising best marketing resources, R&D decisions for progressive investment
- Phase market development: in stage and leading on to increase consumption
(Apple’s competitive strategy of building a whole ecology in hardware, software (apps and music content) as products)
Here’s a video and an extract from the book:
extract from preview of Dr Rob’s ebook. ‘If you build it, will they come?”