How to validate a market opportunity before making significant investment.
There are many challenges facing start-up companies and indeed larger organisations looking to expand into a new market. To overcome these there is a requirement to have a deep understanding of the market, a focus on customer needs and a consistent approach to sales and marketing to be able to justify investment and deliver ROI.
There are key data requirements to support the case for a market opportunity – such as evidence of demand, size of market and potential for growth. Good information can demonstrate the real opportunity to key stakeholders, as well as avoiding unnecessary or risky investments. Below are some key areas to consider:
Defining market potential – test whether the assumptions for investment in a new market opportunity are correct.
Testing value proposition – determine the demand for a product or service within the addressable market. This involves researching customer needs, pain points, and preferences. All feedback can determine opportunity and help refine the proposition and messaging.
Understanding competitor landscape – in many B2B industries, there are established players with strong market presence. Standing out and showcasing the unique value proposition of a product or service is a constant challenge. There is a need to establish to what extent competitors are present and how strong their offering is for the prospective market.
Finding initial customers – one of the biggest hurdles for B2B startups is finding those initial customers who are willing to take a chance on a new, unproven product or service. Building trust and credibility in the early stages is essential. A direct discussion can begin to build that trust and credibility as well as uncovering initial opportunities to build pipeline.
Market validation research does not have to be long and onerous to be effective. Even a small sample of prospective companies profiled can yield important results and help define and refine the approach. Overall benefits can be considerable, the most important of which is to reduce the investment risk, however this approach will also deliver a validated database, feedback to refine proposition and messaging as well as deliver some initial opportunities to build pipeline. If the campaign proves effective it can be extended to drive even more.
Europa offers a defined market validation package to address such information requirements to help evaluate market opportunities.