Market Type hypothesis

Goal

Recognize that market type drives:

• Sales curves
• Marketing strategies
• Revenue and cash flow needs
• Test alternate market types on your company product

See Four types of startup markets

Checklist

• Do you have a new product in an existing market?
• Do you need to redefine / reframe a market?
• Or do you want to create an entirely new market?
  • Is your product / service a substitution for something customers already have?
  • Is it a replacement?
  • Is it a variant on something already out there but can be 'respun' into something new?
  • Is it something totally new?

Positioning in an existing market

• If it is a new product in an existing market, define the basis of competition:
  • Positioning the product is the basis of competition
  • Picking the correct axes for the basis of competition is critical. For example:
    • feature / technology axis
    • price / performance axis
    • channel / margin axis
  • What are the revenue and burn rate curves look like for this market type?
• Who is driving the existing market?
  • Are there any existing standards? If so, who's agenda is driving these standards?
  • Do you want to embrace the standards, extend them or replace them?
  • Are there different global issues than just national onces?
• Do you have some advantage or appeal among any vertical or horizontal market segment?
  • Which markets or segments?

Positioning in an existing market you want to resegment

• If it is a new product in an existing market you want to resegment, define the basis of competition on how you want to change the market:
  • Positioning the change in the market is the basis of competition.
  • This is driven by some new feature of the product or service that redefines the market
  • Redraw the market map and showing which feature you offer that drives this is critical. For example:
    • New customers
    • New distribution channel
    • Feature / Technology axis
    • Price / Performance axis
    • Channel / Margin axis
  • Why would thousands of new customers believe in and move to this segment of the market?
  • What are the revenue and burn rate curves look like for this market type?
• Who is driving the existing market?
  • Are there any existing standards? If so, who's agenda is driving these standards?
  • Do you want to embrace the standards, extend them or replace them?
  • Are there different global issues than just national onces?

Positioning in an existing market you want to resegment

• If it's a new market, create the market:
  • Positioning the creatio of a new market is the basis of competition
    • List the closest markets to ours (a market is a set of companies with common attributes)
    • Draw the market map with you in the centre
    • Give your market a descriptive three letter acronym
  • Why would thousands of new customers believe in and move to this segment of the market?
  • What are the revenue and burn rate curves look like for this market type?

Exit deliverables

• A preliminary hypothesis on the Market Type

Part of: Customer Development Checklist - Customer Discovery Part of book: The Four Steps to the Epiphany