When it comes to market opportunities, you can either build a better product in an existing market, or create a brand new market altogether.
In the first case where the product category and market are mostly defined, the playbook is relatively straightforward. Potential customers already know they have a need and are actively looking for a solution. The challenge is to build a better solution, have more effective marketing, and beat out any rivals in the space.
Creating a new market requires a different kind of strategy. On the upside, there’s a big underserved market right at your feet, but it’s undeveloped territory. People do not even know that they need a solution/product. In addition, marketing is a challenge since there’s no common terminology yet – meaning little search traffic and Word of Mouth.
An example for a big new market on the enterprise side is mobile software for non-desk workers as there are nearly 2.5 billion workers worldwide who are currently underserved by technology in their job. We made a few investments in this space over the past couple of years (e.g. Jobber and Frontdesk) and continue to be excited about the opportunity.
So how can your startup create market demand when customers aren’t yet looking to fill a specific need? There are usually three steps:
1. Brand it
You need to coin a catchy term for your market/value proposition that resonates with your target audience. You need to make it as easy as possible for customers to start talking about the market.
Use white papers, case studies, conference appearances, and thought leadership to communicate the challenges and opportunities in your space.
3. Create demand
Since target customers won’t necessarily be searching for a solution, you will need to leverage outbound sales efforts to create demand. Some enterprise companies, particularly in the SMB space, have nailed this discipline.