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| − | Another possibility is to introduce a new product into a new market. What’s a new market? It’s what happens when a company creates a large customer base who couldn’t do something before because of true innovation creating something never existed before, or dramatically lower cost that creates a new class of users. Or the new product solves availability, skill, convenience, or location issues in a way no other product has. Compaq’s first portable computers allowed business executives to take their computers with them, something simply impossible previously. Compaq created a new market, the portable computer market. With Quicken, Intuit offered people a way to manage their finances on their personal computers, automating check writing, maintaining a check register and reconciling monthly balances; things that most people hated to do and few could do well. In doing so, Intuit created the home accounting market. (By “created the market” I do not mean “first-to-market;” I mean the company whose market share and ubiquity are associated with the market.)
| + | Creating an entirely new market |
| − | In a new market the good news is that your product features are at first irrelevant because there are no competitors (except other pesky startups). The bad news is that the users and the market are undefined and unknown. If you’re creating a new market, your problem isn’t how to compete with other companies on product features but how to convince a set of customers that your vision is not a hallucination. Creating a new market requires understanding whether there is a large customer base who couldn’t do this before, whether these customers can be convinced that they want or need your new product, and whether customer adoption occurs in your lifetime. It also requires rather sophisticated thinking about financing – how you manage the cash burn rate during the adoption phase, and how you manage and find investors who are patient and have deep pockets
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| − | Part of book: [[The Four Steps to the Epiphany|The Four Steps to the Epiphany]]
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Revision as of 19:18, 27 August 2020
Creating an entirely new market
