11 Steps To New Market Discovery For Startups
Ever heard about new market discovery? It is no secret that any business that is not growing it’s customer base and attracting new customers is already on it’s path to closure. In steering a new business enterprise, how do you successfully uncover new customer segments to ensure your business survival?
In this post, I will be sharing with you steps to new market discovery for startups. These are practical, yet simple steps that I have adopted and fine-tuned through my years in leading business development. This chart can be leveraged across the stages of prospecting, testing, penetrations and harnessing of new market
What is a Startup?
By definition, a startup is a fledgling business enterprise. This means that at the beginning of your business, it is believed that only a few parts of your business have been well defined yet. This may mean that when managing new business, the customer segments, market approach, and sometimes even products and pricing still needs further clarification.
In setting up your business to thrive, several systems are touted as the path to achieve certain success. With a detailed study, you will discover that these systems have been developed from the experiences of one business or another that are used as case studies.
Then they are established as guidelines to steer new business ventures through a more definite path to success. For example, the terms ‘above the line’ (ATL) and ‘below the line’ (BTL) marketing was said to be coined in 1954 after Proctor and Gamble began paying advertising firms separately (and at a different rate) from other suppliers who dealt with more direct promotional efforts. The company also effectively separated broad and direct marketing.
In addition to some of the systems and strategies taught in business schools, others require learning and adaptation through practice. To be fair, not everyone attends a business school before kicking off their new business venture anyways. My 11 step to new market discovery for startups as elaborated in the chart below is a simple non-technical adaption for businesses looking to discover new customer segments and new ways in which their products or services can be utilised in their local market.
- As you already know, customer acquisition always starts with setting a definite goal. This goal serves as the key metric by which performance (use) can be tracked.
- Next, you create a list of your known service offerings, a list of the customer niches you think these services might be of value to, and how you believe they may use your services.
- In each of these customer niches, research, and compile a moderate database of 20 – 30 unique customers with their contact. These may be individuals or organizations. Then reach out and introduce your product or services to them based on your hypothetical value proposition and note their feedback.
- Markets with negative feedback might offer an opportunity for reviews. This is mainly because customers would often tell you why your service doesn’t work for them, how they prefer to be served or what alternative services they are currently using to solve the particular challenge you are looking to solve for them.
- For markets with positive feedback, you can proceed by honing in on a few of the customers to learn exactly how your service is working for them, how they are using it, and what part may require improvement. As you understand their ideal use case, you can channel business resources to standardize this service.
- It is also important to understand that some “ideal use cases” may be unsustainable for your business. This can be the case for various reasons: Maybe the profit/expense margins are low, or customer use cycles are far between, etc. These could also be pointers for the need to either optimize your offering or explore other market opportunities.
- In cases where the market accepts your service and business operations are sustainable, it means that you have discovered product-market fit. And you are finally ready to scale!
- Product-market fit for your service means that you can focus on building a sustainable system to offer repeat service henceforth. It helps to keep an open channel of communication to get your customers’ active feedback constantly.
- Finally, as your user base grows, consider building automated systems to reduce service errors and other inconsistencies.