10 Questions to Help You Assess the Market Opportunity for Your Business Idea

January 8, 2013 at 3:42 pm 2 comments

Market Opportunity_Can You Fill Those Shoesby Rob Wolfe – Connected Places Global

As an entrepreneur or anticipated founder of a new business, conducting a thorough market analysis is one important part of what you must do before taking the leap. In his book, 6 Secrets to Startup Success:How to Turn Your Entrepreneurial Passion into a Thriving Business, author John Bradberry says you need to consider your purpose. Why are you pursuing this venture? When it comes to market opportunity, he asks: Are you driven by a great product/service idea? Do you see an irresistible opportunity such as a timely market or an unmet customer need? Can you provide a better business solution for an existing problem?

Assessing the market opportunity can help you, the entrepreneur, discover a sense of demand and whether there is a market (or whether you can establish a market niche) to build a viable business. Of course, there are many other analyses and discovery processes you should work through (such as industry analysis, market segmentation, determination of your target market, how you will differentiate yourself through your positioning and value proposition, etc.), but by answering the ten questions that follow you can establish a fairly solid understanding of whether a real business opportunity exists for you and whether you can fill the shoes within the market. Furthermore, these questions will undoubtedly spark additional questions about your chances of successfully entering the market and establishing a place for your brand and your business.

  1. How large is the current market or potential market (in your target geographical area)?
  2. How fast is the current and/or potential market growing (or declining), and is it an emerging or mature market?
  3. Who are your competitors in this market and what are their offerings? Be very thorough.
  4. Who is already buying this type of product/service or something like it and why?
  5. Why is NOW the right time for you to enter this market?

Talk to clients/customers you have served (or potential clients in your target market) and get them to answer the following questions. The point is to answer these questions from your target market clients’ point of view.

  1. What are the shortcomings in the current offerings and what frustrations do they cause for clients/customers?
  2. What do customers complain about?  What are their points of pain?
  3. What would customers really like to have that they don’t have/aren’t getting now?
  4. Question “top of mind awareness” among current or potential customers:
    When you think of category X (the product/service that you are offering), which brand comes to mind first?
  5. Why does that brand come to mind first?

What other important questions do you think must be answered in order to thoroughly assess the market opportunity for an entrepreneur planning to launch a new business?

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Entry filed under: BUSINESS BEST PRACTICES, ENTREPRENEURSHIP, MARKETING STRATEGY. Tags: , , , .

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2 Comments Add your own

  • 2. Bill Van Eron  |  July 13, 2014 at 4:42 pm

    Hi Rob,
    I was fortunate to have spent 25 years working with product marketing engineers in HP, Agilent and a few others. The form their work took follows about 85% of what you depict herein. I found it very valuable and when I left HP and Agilent, it was sad to see how many startups and small to mid-sized companies lacked this basic diligence. That said, I tend to look at all of the above as ‘market definition’ work that now sets up the real value of ‘market opportunity analysis’. Brian Solis ‘The Future of business’ speaks more eloquently about the critical value of creative/possibility thinking, critical and systems thinking as relatively new ‘priority’ skills for the decades ahead. I learned firsthand over my last 15 years in HP and 10 on my own, that ‘reading’ a market is art & science and something I was doing quite well by gut instinct and a unique systems thinking approach, as it was the biggest reason behind the ‘wilder than expected’ success of my marketing programs. Just to qualify a bit further than using superlatives like ‘wild’, every single launch strategy that applied a market read minimally hit $100M inside 12 months. Two reached $4B inside two years. That is significant. Recently I amalgamated the top 5 fitness trend reports and customized the impact to show market leader Precor where their market was headed and where I felt the ideal intersections would be. The Chief Innovation Officer called me to thank me and said he had never seen anything quite like it. Years before in a 5 day analysis I presented Steelcase with my hypothesis and brand upgrade recommendations. They were shocked a computer guy knew more about their market than they did, but congratulated me and offered me a VP of marketing position. I had to decline.My point is a new breed of agile insight and market read is possible. I know as been doing it. This fits with CEO’s propensity to prefer intuition over the wave of the ‘gotta measure everything’ crowd. I am wondering if you are seeing this shift as I applaud traditional market definition efforts, but am seeing the need for the whole marketing process to get faster, smarter thus more agile so a companies mission – to adapt – is supported by a more agile marketing machine. Note: My new web site will speak to all of this by the end of July.

    Reply

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