Know Your Market and Audience: Enough time to accelerate and compete?
Launching and growing a project or startup requires not only a great idea, product and team. Knowing the dynamics of market and audience are more important than ever in this fast and exponentially changing world. In this blog series we are touching a few points about market and audience dynamics.
There is certainly no shortage of really interesting project opportunities both in the corporate and public sector as well as in the realm of startups. The question is often if, how and when a project can succeed?
- What is the net growth rate of the market and audience?
- What portion of the market is really addressable?
- How does the composition of the cohorts change over time?
- Is there enough time to accelerate and compete?
This blog series will explore these question. In this blog post we will look at the question:
Is there enough time to accelerate and compete?
There is usually no vacuum in the market. Every project is competing with other players and alternatives. Therefore it is essential not only to understand the current strength and competitive position but also to anticipate how things are changing. Especially important is the question of timing.
The right timing of a project is important and it involves several key questions:
- Is the market there? In other words: is it available?
- Can we address the market with the current or next version products?
- How long does it take to deliver a product which can compete? Note: keep in mind that the other guys, your competitors, are also moving.
- How long does it take for our campaigns to deliver results?
- What are the resources requirements in order to deliver on this initiative? This question is not only about marketing funds but more importantly about people. Therefore one needs to consider also:
- Organisational agility: How long does it take to hire people and get them up to speed?
- Marketing agility: How long does it take to develop, test and roll out a campaign?
Consider the following basic scenario. We are simulating a high growth business and a “normal” competitor who is less agile.
This performance scenario shows a certain surprise effect. If the business can generate a viral adoption, the competition is being outperformed in a short period of time. Of course it is needed to have a solid and performing product. But the timing of marketing fund allocation is equally important. Note again how the viral adoption results in rapidly increasing sales rate (customers acquired per month!). It will be hard for any competitor to keep up with that velocity!
But keep also the dynamics of the overall population and market in mind. In this performance simulation the sales rate is coming down very quickly again after it peaks in month 34 approximately. This critical turning point has nothing to do with product quality. It is all about the dynamics of viral adoption and available market. All things equal, the fast moving business which understands how to unleash viral growth has a key competitive advantage.
Of course it is important to make a good bet when and how to allocate marketing resources. There is no point in driving a campaign, when the market is not ready. It would be more prudent to keep some powder dry and then push for rapid viral adoption.
And while this success is sweet, it is critically important to reinvest the funds form this growth wave early enough into new product development and innovation. Otherwise the growth with just overshoot and collapse.
More about this and other concepts in the “Shape Growth” Series and the Service and Software-as-a-Service depth briefing in WITTIGONIA Online Academy (http://academy.wittigonia.com).