Commercialising innovative ideas feels like a constant run. It requires immense effort as you attempt to move forward and make progress, while facing one hurdle after another.
But it’s not just simply a case of running … in fact, entrepreneurs and innovators are trained to run fast. Time can be one of your greatest enemies when new products or services are waiting to be adopted, and speed is seen as critical to successful innovation.
Yet running, and even running fast, may be useless if you are not running in the right direction! If you are not pursuing a valuable market opportunity, you are wasting your time, energy, and resources … and that of others too!
Finding the right direction, however, is not as obvious as you might expect. Your unique resources and abilities can address different needs for different sets of customers, thereby creating several potential market opportunities for your venture, and a set of possible paths in your entrepreneurial race that you may never have considered!
So, how can you make sure that you are, indeed, running in the right direction? In other words, how can you map out your opportunities, and find out which one is the most attractive for you?
To find the answer, you should first take the time to uncover different market opportunities for your business. Think about different applications or products that you can offer with your unique abilities, and different types of customers whose needs you can address. Finding the right direction begins with identifying your alternative paths, and generating a set of possible opportunities to choose from.
Once this becomes clear, you must thoroughly investigate your options, and understand the pros and cons of each market opportunity on the table, so that you can choose a promising path. Your goal is to carefully evaluate the attractiveness of your options, or else you may find yourself running in an inferior direction.
An attractive market opportunity has two main characteristics:
First, it bears high value creation potential. That is, it offers a compelling reason for a large number of customers to buy the product or service, who will be willing and able to pay for it.
Second, it entails a relatively low challenge in capturing this value. That is, the difficulties in developing and delivering your product or service, and the risks associated with your business environment are manageable, and overcoming them is achievable in a reasonable time frame.
All in all, you need to assess both aspects to make sure that you are betting on an attractive opportunity.
But bear in mind that choosing which markets to play in is one of the most fundamental decisions you will ever make in your commercialisation process. It is crucial not only because this choice is key for creating value and generating sales, but also because it has a long-term impact on the DNA of your venture. The market choice influences the venture’s identity, culture, structure, brand name, and many other aspects which are difficult to change down the road, or might even be irreversible.
So, don’t fall in love with your initial idea just yet. Take the time to understand what else may be in store for you, and thoroughly evaluate your opportunities before you make your choice. Whether this is your initial market entry choice, or you are managing your growth strategy, use this approach to double check or re-direct your strategy, to make sure that you are running in the right direction.
Dr Sharon Tal and Prof Marc Gruber are the co-authors of Where to Play, 3 steps for discovering your most valuable market opportunities, published by FT publishing. They also have a free EdX course. For more information go to www.wheretoplay.co
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