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How to identify a profitable market?
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From my perspective there are four key elements entrepreneurs should consider when looking for a potential market.
First, if you can´t describe your customers you can´t define a reliable set of characteristics about their behavior and pain points. Second, if you can´t reach your customers and access them in an affordable way your solution might be good but not profitable. Third, if you target an oversaturated market, you spend too much time and money on differentiation rather than providing your customers with value. Fourth, if the size and mass of the market is not large enough it cannot return the investment it cost of entering the market. This insight does not come from a textbook or any fancy MBA but from my real life failure. Of the four key elements mentioned above, the one I have struggled with the most, is the lack of access to the customer. This is why I recommend every entrepreneur to build an audience before building the product. In that way you will get the experience and market right before you get the product wrong. |
Hi! I'm Johan.
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