“Starting up the start-up to fulfill its destiny. The challenge of effective and actionable market segmentation.
The market climate for information technology has made crossing the chasm harder than ever before for new companies. Such was the issue with a venture-funded start-up in the components business. With a high-potential concept, the CEO’s issue was how to covert it into cash from first customers.
Like with most new companies, market segments had been identified and prospects contacted. But validation of the real, sustainable market opportunity and the right products necessary to build a lasting franchise break had yet to be considered.
Deeper market segmentation to accelerate concept-to-cash
Working with the client executive team we applied our proven methodologies to first focus and validate their market opportunity. We found that drilling deeper into the market segmentation model revealed a fast-emerging subset of their initial, broadly targeted market. Our work also drove reassessment of product development priorities; partnering and channel strategies; as well as sales targeting and contact. Our experience in working with hundreds of start-ups in similar situations provided a direct path to the right answer the first time, accelerating the learning curve and avoiding missteps. Our recommendations also served to sharpen the company’s vision and mission with resulting benefits to the firm’s competitive differentiation.
Focus leads to market traction
With a specific target market and first product direction prioritized, the company’s limited resources could be utilized to maximum effect. A significant deal with a leading channel partner was completed in short-order. And our best-practices strategy for selling the first customer brought the company to negotiations with the largest customer in our client’s first targeted segment.