In many cultures, the tolerance for risk, and acceptance of failure, is low. This can create debilitating “fear and trembling” for the entrepreneur, who finds himself or herself in the midst of this triangulation. This is often termed the Tall Poppy Syndrome: the tendency for the many to bring down the few who “stand out” in the crowd.
Studies indicate that over 92% of all new ideas fail. Believe it or not, this is not because the idea, or the technology or process behind the idea, is not good, but because there is no market for it – nobody cares, and nobody buys. And, if a company cannot sell its products or services, it is destined for the dustbin of history. So, you ask, how do I reduce the margin of error and mitigate market entry risk?
According to Jim Rohn, the Business Philosopher, one of the three keys to successful selling is to “talk to lots of people.” In his insightful book, If You Build It, Will They Come? Three Steps to
Test and Validate Any Market Opportunity – required reading for any start-up – Dr. Rob Adams, renowned business professor and strategy consultant, applies this concept to effective market assessment. His advice is simple: talk to at least 50 expert validators to get their opinion of the market applicability of your idea; if you get a “go” decision as a result, talk to 100 more! If done correctly, this will accomplish the following objectives:
Ensure with a high level of accuracy that there is a market for your idea;
Open the door for future follow-up conversations that may lead to sales;
Help you avoid the pitfall of squandering your valuable resources developing a product that no one wants;
Pinpoint your R&D spend on features that deliver the benefits desired by future customers.
Your ultimate goal is to achieve a “360° perspective” of your market opportunity. I call this “listening to the Voice of the Market.” In order to get a well-rounded perspective, you will need to talk to industry experts, manufacturers, distributors, integrators, regulatory experts, end users, investors and competitors – yes, I said, “competitors”! These conversations with decision-makers and influencers of diverse expertise will provide invaluable “holistic” guidance to you in the development of your market “attack” plan.
More to come on how to turn these conversations into gold. For now, get on the telephone, get out of the building, talk to lots of people, and listen to what the “Voice of the Market” says about your business opportunity!
Contributed by Glenn E. Robinson
Managing Director at IC2 Institute, The University of Texas at Austin, and XLr8 Andhra Pradesh Technology Business Accelerator, Senior Training Consultant to the DHI Business Acceleration Program (BizAP).