Steve Blank - How big is my market? A market analysis.
Can we make a million or even a billion? When our hypotheses and our price model are in place, we move on to the next phase. We need to recognize and understand whether our market has any growth opportunities at all.
Now that we have been on the market for some time, our product has been well received and we have completed the first rounds of optimization, there is a very important next step, we have to think long term and analyze the market. A good example of this is the ice cream parlor in the city. When the first nice days get going, the business gets going. The deeper into summer it goes, the more the ice cream parlors will be bustling. More staff, more raw materials, more seats, ice cream flavors, waffles … Everything has to work hand in hand to then collapse almost overnight. Summer has barely passed and the business is over. The operators of such ice cream parlors have adapted well to this over the years. They either don't have a single day off until then and then enjoy a few weeks and months of rest and refueling or they have a second concept for the shop and then chime it in for winter or a combination of both.
When our startup is up and running, we also have to see winter coming, we need to understand where and how our growth opportunities are, which potential customers we have, who our competition might be and we need to have an answer. The interesting thing about competitive analysis is that it gives you an approximate overview of the potential size of the existing market and whether it has growth potential. Sometimes we get an insight that we may not like. A niche market can still have a lot of potential, but it does indeed happen that it will not be crowned with much success and if we recognize that we should seriously question it.
If we, as a startup co-founder, do not constantly deal with these challenges and constantly adapt to them, the chance of becoming a unicorn is low or non-existent.
This article was written by our CEO, Bernd Korz. With his experience as an entrepreneur, he shares his vision about the lessons provided by Steve Blank. Join us every week for a new article on Steve Blank’s lectures.
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