“Opportunity is missed by most people because it is dressed in overalls and looks like work”
– Thomas Edison
Welcome to Module 3: Market Opportunity
A critical step in building your business or exploring the commercial potential of an invention is to understand the market opportunity, or the need that is not currently fulfilled by existing solutions in your market. This is where you put your solution to work and identify how you will offer a differentiated product or service. Once you zero in on the market opportunity, you will need to analyze the market in terms of size, segments and trends in order to identify your “sweet spot”. If the target market potential is too small or has unfavorable trends, there are virtually no prospects to scale your idea and to get to profitability. Putting these pieces together will result in the identification of the perfect blend market opportunity, size, and trends.
Your solution is only valuable (and can only become a business) if there are enough customers out there for you to capture. So, how do you define a “big” and attractive market? “Big” is not an absolute number in the case of market size and related opportunity. In order to determine if a market is sufficient to support your business, you will need to roll up your sleeves, fire up the computer, hit the streets, and do some good, old fashioned research. Start at the top of the market: look for statistics and studies that can provide context around your market (for example, if you have an idea for an app for air travelers, you can find data on the number of flight, number of passengers, dollars spent, airline performance, airport traffic, etc.) which will help frame out the big picture.
Next, drill down into the market segments that represent your best potential customers (perhaps business travelers from the previous example) which can represent your entry point. Then, research how you can expand from the entry point into full market release. Finally, you should research trends and innovation to help quantify how your new concept will disrupt the current market. A market is attractive (i.e. “big” enough and trending favorably) if there is room for your concept to grow and achieve profitability to a level that meets your expectations and will allow you to build a business consistent with your goals. A comprehensive Market Opportunity analysis addresses the following:
- Potential customers are easy to identify
- These customers can be reached efficiently
- Customers have a need that is not satisfied by current offering (market opportunity)
- The number of potential customers is large and they are willing to try new things
- The market is growing and innovative
- Your product or service can be distributed in a cost effective manner
- You have talked to potential customers and have gathered data on their reaction to your concept
- You have early sales or serious expressions of interest from potential customers
If you haven’t already downloaded the the StartUp BreakDown template, I recommend you do so right away. This fillable form will allow you to take the lessons from each of our 8 modules and apply them to your business idea. By the end of the course you will have created a customized business summary and analysis for your concept which will put you on the path to success!
— Craig Markovitz
Click to download your very own StartUp BreakDown template. Take the lessons from these 8 modules and apply them to a framework for your business or idea!