Sizing up the market: Why this step can make or break your business

While Kenya thrives as the hotbed for entrepreneurship in East Africa, still many complications flood the business start-up phase.  

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While Kenya thrives as the hotbed for entrepreneurship in East Africa, still many complications flood the business start-up phase. As an entrepreneur, you know that defining your market stands as one of the most critical steps in building a successful venture.

If you get it right, then you'll be poised for growth and innovation. However, if you get it wrong, then you could be staring down the barrel of failure that will haunt your business for years to come.

Unfortunately, the traditional ways of sizing up a market are often flawed, and actually lead to the downfall of even the mightiest companies in the world and right here in Kenya. Just look at the cautionary tales of Kodak and Nokia once excelled as titans of industry that fell victim to the common pitfall of defining their markets based on their products rather than placing customers at the centre of their business and focusing on the true needs of their customers.

Kodak, for example, thought their market was "film." Which was a product-based approach. But when digital photography emerged, allowing customers to preserve and share memories in a whole new way, Kodak found itself quickly left behind. Kodak should have thought of itself as in the nostalgia business.

Nokia, on the other hand, was convinced that its market was "mobile phones" but got turned upside-down when smartphones came along and transformed the entire landscape to keeping in touch across multiple platforms and methodologies.

The problem with the above and other product-centric market definitions is that they are inherently unstable. Technology marches on, customer preferences shift and sometimes shift drastically and rapidly, and then what was once a thriving market disappears seemingly overnight.

Ask the once-mighty giants of Britannica and Blackberry with their respective declines happening at lightning speed when they failed to recognise that their customers were not actually buying their "products," but rather, "hiring" or “utilising” those products to get a job done.

So instead, focus on what your customers are using your products to accomplish, not on the products themselves. Include customer surveys on how users are achieving their goals with regards to their getting the job done most effectively even if it does not involve your product directly. Then you will pick up on emerging trends even before they hit you head-on and drop your profits.

Another solution to the secret of avoiding the fate for your business involves truly understanding your customers' "jobs to be done". Essentially the functional, emotional, and consumption-based goals customers are trying to achieve.

When you define your market in those terms, without mentioning any specific solutions or products, you unlock a much more stable and expansive view of your opportunity.

Imagine if Kodak had focused not on film, but on helping people preserve and share their cherished memories. Or if Nokia had aimed to connect people on the go, rather than just dominating the mobile phone market. The possibilities for growth and innovation would have been vast.

As an entrepreneur as you work to size up your market, forget about your products for a moment in your planning process. Instead, dig deep to uncover the core jobs your customers are trying to get done. What are their functional needs, their emotional drivers, and the ways they want to consume your solutions?

Layer these into your customer surveys, focus groups, and interviews. If you get that right, then you'll be well on your way to building a business that holds significantly more probability to withstand the test of time no matter how the technology or competition may shift.

Remember, the market always wins. The companies that thrive are the ones that consistently meet and exceed their customers' needs, regardless of what form those needs may take. So don't get caught up in the allure of your own products or services with all their unique bells and whistles. Instead, relentlessly focus on the jobs your customers are trying to accomplish, and you'll be well on your way to market domination.

Mashary Keya is a Strategy Advisor at WYLDE International. You may connect with Mashary via email: [email protected]

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