As B2B technology companies leave the early stage of incubation and product development they often struggle with identifying the best market for their offering. Misalignment between a company’s solution and the needs of the market is the number one reason for failure. In Tim Draper’s recent post on why startups fail many of the reasons had to do with understanding the market.
- They aim too high. A successful start up identifies a narrow niche and expands.
- They go after too small a market
- They don’t charge enough, i.e. the benefit isn’t compelling
- They get broadsided by incumbents, i.e. the point of differentiation isn’t clear
To succeed companies need to simultaneously answer three critical questions:
- Who is our customer?
- What do they need that we offer?
- Why is our answer distinct and better than other options?
In a nutshell it comes down to positioning and branding - the art and science of defining the best opportunity for success. This is what we as marketers do.
