When to Research Alternative Markets

The following is adapted from Takeaways: Secret Truths from Leading a Startup.

Although staying true to your mission is key, you must also be open to other markets and alternative uses for your products. Does this sound like a contradiction? Let me explain.

In late 2015 at my digital wearables startup, Loopd, we had validated our products and services in the corporate event space when I started wondering about other markets with more potential. With the holiday season quickly approaching and the predictable December business lull that comes with that, I decided to launch an experiment and gave myself thirty days. 

My mission: to see whether Loopd could integrate into other, less risky markets.

The Research Process

I began with a systematic study of all the use cases for contact exchange, tracking, or identification, with the goal of identifying three possible use cases in viable industries—warehouses, hospitals, retail, manufacturing, entertainment, and general business.

For each market, I researched use cases with internet searches, telephone interviews, and in-person visits. The internet searches were more theoretical and provided limited validity. Telephone interviews worked well, but only when I had a clear objective for the call. 

During one conversation, I spoke with Eric Olafson, a retail software executive who specializes in networked in-store systems. He suggested that Loopd could track associate movements in the store and then correlate with analytics on productivity relative to sales and other metrics. Though this idea had potential, Eric was unable to act on it because he had just sold his company to Salesforce. Nevertheless, he said when his company was fully integrated, he would advocate for his idea.

In-person visits with key industry professionals were by far the most valuable because of the power of casual conversation. 

One day, I met with Dr. Julian Goldman, head of a group of research initiatives at Massachusetts General Hospital (MGH). He was looking at how to encourage medical device manufacturers to create plug-and-play clinical devices and believed that Loopd’s contact exchange features could serve as a model for wireless device-to-device communication. Though Dr. Goldman suggested that I could work with manufacturers or the MGH lab on the future generation of these devices, he did not identify an immediate and specific role for Loopd.

In another in-person visit, I simply walked into the Office Depot store in Oakland, California, and spoke to the store manager. He was full of unique ideas, including how Loopd could help him identify and prosecute employees involved with theft. He also envisioned using a tool like Loopd for traffic analysis with strategically placed store promotions.

After all this research, I added a total of seventy-five cases under various industries on my spreadsheet. To focus only on the best opportunities, I asked my engineering, sales, and support staff to rate Loopd’s potential with a score of one (low) to five (high) for the various aspects of each idea:

1. Cost
2. Integration
3. Setup
4. Loopd prior experience
5. Value
6. Feature richness
7. Stability

After this comprehensive analysis, eleven strong use cases remained. We then applied an even greater degree of scrutiny and whittled this list down to two retail cases: worker monitoring and aisle tracking.

Worker monitoring followed the movement of workers and then quantified the amount of time they spent taking breaks. It also focused on identifying the closest and most relevant worker on the floor when customers were in need of assistance. With aisle monitoring, retailers could assess competing promotions and layouts to reveal the areas of highest traffic.

Although we were invested in this exploration process and excited about these two viable use cases, our team ultimately decided not to act on the opportunities. We needed to decide whether we were a technology platform or a solution for personal connections, and during this process, we recognized that what differentiated our company was our ability to connect people and catalyze relationships.

Following an internal evaluation of our capabilities, we estimated we would need to add retail expertise and create a convincing proof of concept (POC). Because a POC could take six months or more even with the best partner, we opted to put these ideas on the back burner until funding enabled us to pursue them aggressively. 

In the end, we stayed true to our course and redoubled our efforts to solve our initial problem. Although that month-long detour to explore other market opportunities could be seen as a waste of time, it realistically renewed our commitment and offered us new perspectives on solving existing challenges. 

Whether or not you change directions after researching alternative markets, you’ll be in a more informed position than when you started. 

For more advice on growing a startup, you can find Takeaways on Amazon.

Brian Friedman is a millennial entrepreneur who went from a blank sheet of paper to a successful multimillion-dollar exit in less than three years. During this time, he secured over $2.5 million in angel and venture capital financing, hired more than ten employees, opened  offices in San Francisco and Taiwan, and sold global brands like Intel, Cisco, Castrol, and Box. His ideas about analytics and business practices have been quoted in TechCrunch, Yahoo!, Forbes, and other leading publications. He started the largest Wearable Technology Startup meetup in the US and now serves as VP of digital innovation on the executive team at Aventri, a leading enterprise cloud-based, event management software company.