Product, meet market
Just build it and they won't come.
Thursday, January 26 2012 || Features || BY Christine Nikiel
And while customers may vary, they should essentially want the same sort of pain relief, says Nagel. She suggests defining the ideal customers and creating a persona for them.
“Talk to potential customers about what they want. Look at how they operate without the product and how that would change with your product. This helps you make decisions that are closer to the real world as opposed to asking friends and family who are most likely not your target market.”
When it comes to offshore market validation, good planning is essential, says Alex Morcom, associate director at market strategy firm Howard and Company. Kiwis tend to have a relaxed attitude toward plotting offshore expansion, he says.
“You get on a plane to a trade show, shake some trees and see what falls out and you’ve done your market entry.”
Instead, advises Morcom, get everyone in the organisation — key stakeholders, advisors, investors — on the same page about where you want to go and how you’ll get there.
“A lot of people write their strategy and vision but don’t translate that into tactical action and how they will apply their resources.”
Take time to figure out the markets where you’ll most likely be successful, Morcom says. This means taking into account things like market size, the language and culture, what’s driving demand in that market and what the competition is like.
Not surprisingly, a big killer for most companies expanding offshore is cost.
“Make sure that you either have great capital invested in the company by partnering with the right people or that you’ve got great local momentum or you’ll spend the entire time worrying about profit and loss and cashflow. Your absolute focus should be revenue.”
Most successful exporting companies enter an offshore market with a partner, and Morcom advises using New Zealand-based organisations such as New Zealand Trade and Enterprise and the Kiwi Expat Association among others, to help find your target market’s influential points of contact.
Market validation isn’t something to rush, says Nagel. A recent report by the Startup Genome Project, a US research project, shows that with a full time, focused team it can take about nine months. Also, she says, companies need to acknowledge that a product or service very rarely survives its first contact with customers. It should be continuously evolved based on customer feedback.
It shouldn’t be a one-off act either, Nagel says. The market validation process can be equally valuable for established businesses.
That’s something Microsoft probably wished it had remembered in 1995 when it introduced Bob, a smiley-faced icon designed to help novice computer users navigate the software. Sadly, users found Bob’s cartoon-like nature patronising. Bob hit 7th place in PC World’s list of the 25 worst technology products of all time, a spot in Time’s list of the 50 Worst Inventions and Cnet.com’s number one worst product of the decade. Oops.
