More often than not, companies manage to lock themselves into unnecessarily narrow market segments and, in so doing, lock themselves out of huge growth opportunities. It's so prevalent it's like an epidemic out there. I see it all the time.
Don't get me wrong; it's entirely understandable. Conventional wisdom dictates that startups, for example, have to maintain a razor-like focus if they want to succeed. But so many companies fall into this trap that I think entrepreneurs - and those who advise them - have got to take a more balanced approach, conventional wisdom be damned.
Look, if all the key stakeholders - founders, executives, investors - agree on a strategy, then by all means, put your head down and go full speed ahead. But when you start to see signs that 1) customers want B instead of A, 2) customer traction isn't happening as planned, or 3) you're winning customers but the market isn't materializing, then it's a good idea to pull your nose out of the grindstone and get a little perspective, at the very least.
Having said all that, conventional wisdom exists for a reason and we don't want to end up with the reverse problem, i.e. dumping the strategy at the drop of a hat or strategy du jour, for god's sake. So a balanced approach is the way to go, and a good start is to keep a lookout for the --
7 Ways Companies Miss Out on Huge Opportunities
- Technology snobbery. This has to be, without a doubt, the number one reason why startups miss out on big market opportunities. They invent something amazing and customers just don't want something that amazing. Aka NIH (Not Invented Here). Which brings us to --
- Customers want evolution, not revolution. In general, markets naturally gravitate to lower risk, easier to implement solutions. That's because companies don't want to have to invest huge amounts of capital and resources on something that may not fly. As a result --
- A less risky or more palatable solution has appeared. Either that or the old or previous solution that people have been using for years is hanging on longer than expected. Sometimes your solution is just too complex and something more elegant arrived on the scene.
- The chicken and egg dilemma. It usually goes something like this: customers say they love your hot new widget and they'll buy it when it comes down in price. But it can only come down in price when the volumes are high. Instant dilemma that's often very tricky to break.
- Marketing and sales naivety. Price yourself out of the market by, for example, pricing higher than the incumbent's product or service because you think your stuff is better. Unfortunately, nobody will ever know. Or limit your growth by not aggressively forward pricing, planning cost reductions, etc. Or target the wrong channel, target the right audience with the wrong marketing vehicle ... I can go on and on.
- The problem you're solving isn't the real problem. This one is classic. You've got a well-defined problem statement and a great solution that solves it, only you never really circled back to check with real customers to validate that you scoped the problem right in the first place.
- The market has moved on you. Hey, it's a fast-paced world out there. You're developing a product or service based on a snapshot of the market at one point in time. The problem is that markets don't sit still and wait for you to get there. They're moving targets. As they say in hockey, you have to skate to where the puck is going to be.
Also check out:
- How Great Companies Innovate Without Inventing
- How Brilliant Ideas Destroy Companies
- The 7 Habits of Highly Innovative People
Thumbnail Image CC 2.0 courtesy Flickr user 7 Bits Of Truth