Last week, I attended a seminar entitled Sizing Your Market, given by two Bristol-area gentlemen (Greville Commins, Matt Hatch). Between them, they have launched, led, and exited several tech businesses over many years.
It’s an important topic to businesses, that’s obvious.
On the surface, though, it might seem to be an irrelevance to lone rangers who just want to beaver along and get the day’s work done..
Even if you are an employee, or a contractor working for a single customer at a time, you’ve got to think like a business if you want to protect yourself and get ahead. You’d better have at least a gut feel for how many other people you are likely to work for in your lifetime, what their needs/wants are, and how much they are prepared to pay for your services.
Here’s a quick summary of what I learned at the Sizing Your Market seminar:
- No matter how smart you are, your market forecast will be wrong. (Reminds me of what a costing expert told me once: “No matter how detailed, your cost model is wrong. That’s OK, What matters is, How wrong is it?“)
- Your potential investors (assuming you want some) have no idea how big your market is. If you don’t either, how will you ever persuade them to invest?
- There is no substitute for talking to your customers. Not just once, but again and again.
- Have a list of insightful discovery questions that you ask your customers. Not all at once, but over time.
- Check out the investor relations pages of your customers and competitors.
- You’d be amazed at what useful information shows up under Google’s image results.
- You want to be in a market that:
- You can control
- Is growing
- Has little (but not zero) competition
- Has high profit potential
- Has definable (and lots of) customers
- Doesn’t have excessive customer acquisition cost
- Has demonstrable demand