Unlocking the Potential of Your Venture

In the early stages of a new venture, a founder should assess the market need and any standard benchmark availability for their product or service, It will immensely help them to identify the existence of either or both and how they change over time. Once their existence is established it can be found ( refer to the picture in which quadrant the venture exists). It helps to think about the strategy moving forward. The existence of benchmarks and needs may signal a competitive market and the absence of both may signal the absence, just by being aware of this conundrum the path forward becomes easier. Depending on the quadrant, different strategies may be necessary to increase the chances of success for the venture.

Quadrant 1: Both a market need and benchmarks exist

• This is the ideal position for a venture, as there is a clear demand for the product and established standards to measure performance.
• In this situation, the founder should focus on executing the business plan, building a strong team, and differentiating the product or service from competitors to gain a competitive advantage.
• The founder should also make sure to communicate the value of the product or service effectively to attract customers, partners, and investors.
• It's also crucial to keep track of industry trends, customer feedback and competitors to stay ahead of the game.
• You can also look at Kim and Moubourgne’s strategy canvas to discover new points of differentiation or Blue Ocean.

Examples

• Ride-sharing services like Uber and Lyft, meet a clear market need for convenient and affordable transportation and are able to measure their performance against established benchmarks like the number of rides completed, user satisfaction, and driver retention.
• Social media platforms like Facebook, Twitter, and Instagram, meet a clear market need for connecting with friends and family online and are able to measure their performance against established benchmarks like user engagement, ad revenue, and user growth.

Quadrant 2: A market need exists but benchmarks do not

• In this situation, the founder should focus on developing metrics to measure the performance of the product or service and communicate the value of the product effectively to attract customers, partners, and investors.
• The founder should also conduct market research to understand the target market and identify the best distribution channels and pricing strategies.
• The founder should also consider seeking out partnerships with other companies or organizations that can help establish benchmarks for the product or service.
• It is an immense opportunity to define your own benchmarks and stay on top of them.

Examples:

• Virtual reality therapy for mental health addresses a growing market need for effective treatments for mental health conditions but there are no established benchmarks for measuring the performance of virtual reality therapy yet.
• Electric vertical takeoff and landing aircraft (eVTOL) addresses a market need for more efficient and sustainable urban transportation, but there are no established benchmarks for measuring the performance of eVTOL yet.

Quadrant 3: Benchmarks exist but there is no market need

• In this situation, the founder should reassess the product or service and determine if there is a way to adapt it to meet a real market need.
• If not, the founder should consider pivoting the venture to a new product or service that does meet a real market need.
• The founder should also be open to feedback and consider the feasibility of the product in the market.
• It is often seen in a new type of technology product for say CRM but customers are not likely to use it in the way the product is designed.

Examples:

• A new type of camera is optimized for taking pictures of only a specific type of flower, but there is no market demand for such specific pictures.
• A new type of transportation that uses magnetic levitation to travel through the air, but there is no market demand for such a transportation mode.

Quadrant 4: Neither a market need nor benchmarks exist

• In this situation, the founder should reassess the product or service and determine if there is a way to adapt it to meet a real market need and develop metrics to measure its performance.
• If not, the founder should consider pivoting the venture to a new product or service that does meet a real market need and has established benchmarks for measuring performance.
• it is also important to be open to feedback and consider the feasibility of the product in the market.

Examples:

• A hypothetical new transportation mode that uses teleportation to instantly transport people from one place to another, but there is no market demand for such a transportation mode and no benchmarks for measuring its performance.
• A new technology that aims to generate energy from a new type of particle has not been discovered yet, but there is no market demand for such energy and no benchmarks for measuring

It's important to note that the 2x2 matrix is not a one-time assessment, but rather a tool that should be used throughout the life of the venture to track progress and make adjustments as necessary. As the venture evolves, the founder should constantly assess the market need and benchmark availability and adjust the strategy accordingly.

A founder should also consider seeking out advice from mentors, experts in the industry and other entrepreneurs who have experience in similar ventures. This can provide valuable insights and guidance for navigating the challenges of starting a new venture and help the founder to migrate to a more favourable quadrant.

References

* "The Innovator's Dilemma" by Clayton Christensen, describes how established companies can struggle to capitalize on disruptive innovations because they are constrained by existing metrics and business models.

* "Business Model Generation" by Alexander Osterwalder and Yves Pigneur, provides a framework for creating and testing new business models, including strategies for validating market needs and developing metrics to measure performance.

* "The Lean Startup" by Eric Ries, which provides a methodology for building and launching successful startups by validating market needs and creating minimum viable products.

* "Crossing the Chasm" by Geoffrey Moore, describes the challenges of bringing innovative products to market and how to overcome them by understanding the target market and creating a compelling value proposition.

? Sameer Babbar

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Disclaimer: This is for information only. It does not take into account your own objectives, financial situation or needs. The author, his company his associates, his directors, his staff, his consultants, and his advisors do not accept liability for any loss or damage, including without limitation, any loss, which may arise directly or indirectly from the use of or reliance on the information provided.

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