This is the first post in a series on launching a successful startup.
One of the most common mistakes new entrepreneurs make is trying to be everything to everyone in the hopes of increasing their market share. In the beginning, many new entrepreneurs can be overwhelmed by their own brainstorming taking an “act now, plan later” approach to get a jump on the competition. But the foundation stage of a new venture is critical because it’s the stage when entrepreneurs must define the specific ingredients that make their product or service competitive—the stage where they determine a target market that will use that product or service. Failure to do either could result in a business that never finds its niche, and therefore, never sells.
Thankfully, budding entrepreneurs now have a road map. In Disciplined Entrepreneurship: 24 Steps to a Successful Startup, Bill Aulet, Managing Director of the Martin Trust Center for MIT Entrepreneurship, goes beyond theory to outline several concrete steps anyone can take to be a successful entrepreneur. In his book, Aulet stresses the importance of segmenting your market to find the sweet spot that will guarantee a successful business. He defines a sweet spot as that place where a product or service connects with a target audience that will buy, use, and wholeheartedly adopt that product or service, eventually spreading the word to other potential customers.
Guidelines for Start-Up SuccessHere are a few steps that will help during the initial brainstorming phase:
- Think big: Start by brainstorming a wide array of market opportunities, including the long shots, because this will help to expand possibilities and unearth hidden opportunities.
- Talk to every potential customer: Go to trade shows and conferences. Connect with alumni. Start with the most immediate circle—family, friends, and neighbors. Focus on listening to their feedback and nonverbal communication. You can learn a lot about whether someone is excited by your ideas through their body language, eye contact, and voice inflection.
- Don’t limit yourself at the start: You may have a preconceived idea of your market, but you may be wrong. Aulet says, “Instead of telling a potential customer you want to create a social network for teachers, students, and parents to improve communication, tell them you want to improve education using technology … then ask yourself why you are passionate about the idea.” You may discover that education is your primary passion. Or, if technology is your primary passion, don’t limit yourself to the education industry.
- List potential industries: Then list who might benefit from your idea in each industry. This will help to identify your end user—the ultimate customer who will buy and loyally use your product or service.
- List all potential end users and divide them into categories: Using the education/technology example, define your end users. Teachers, administrators, parents, and students are all potential end users. But age, location, and subject can further subdivide each category. Identify the daily tasks of each group of end users and ask yourself why a particular end user would buy a product in a specific industry segment.
In the brainstorming phase, the key takeaway is to leave no stone unturned, as this will help narrow your focus and find your target market for the next step. The time spent talking to potential customers, discovering industry information, and brainstorming with end users will not only sharpen your business communications skills; it will paint a clear picture of your business’s sweet spot. Because, as any successful entrepreneur knows, the first step in achieving success is to know what success looks like.
Learn more about entrepreneurship and innovation in the MIT Sloan Executive Education innovation@work webinar, Understanding and Unlocking the Potential of Innovation, Entrepreneurshi