by Craig Roth | October 22, 2019 | Comments Off on In a Nascent Market, the Buyer Can’t Even Tell You What They Want
The current cloud-based collaboration market is still emerging despite its long history. I’d even go so far as to say it is “nascent”. To understand why I would classify it as nascent I need to contrast it with a mature market.
In a mature market, the buyers know what they want. The buying process is a negotiation of packaging, pricing, and delivery to see if the vendor and buyer can come to agreement better than another vendor can.
In a nascent market, the buyers don’t know what they want yet. They have an inkling, usually in higher level terms like “to seamlessly share files with my team” or “to hold more productive meetings”. But the specific mechanics of how that should work are not fully baked.
A nascent market can be a lot of fun, since the vendors have carte blanche to innovate. They can explore different ideas and approaches. Margins are high because competitors don’t offer the same approach. And if you can hit the sweet spot just right, the buyers say “Ahh! Yes, that’s what I need!” and pull out their checkbooks. Very exciting!
Of course, it can be frustrating as well. There are many false positives, as many solutions to workplace annoyances can scratch an itch and get that “Ahh!” response, but not for a long enough time or with enough buyers to make the company a going concern. In the meantime, it takes a lot of R&D to develop a solution that buyers may simply reject without even telling you why. Or, worse, the buyers think they know, but once they see the solution they decide it just doesn’t click.
If you’re not eager for the visioneering and risk inherent in nascent markets, then do yourself a favor and wait a few years for the market to develop. Other vendors will spend their money (or, more likely, their early-stage VC investor’s money) to try out new ideas, most of which will not catch on. But by seeing example after example, buyers will slowly develop a consensus on the best approach to solving the problem. At that point you can enter the market, although without first mover advantage and with diminished margins.
But if you’re excited about jumping in, be prepared to do a lot of listening. Buyers may not know the details of what they want, but they know their drivers, reasons for buying into this market, and keywords that act as signposts you’re going in the right direction. Ask a lot of questions and take good notes on what prospective customers have to say, cross-referencing these learnings until the details of the picture come into view.
When you’re ready, recognize your role as a visionary and evangelist as well as a technology provider. Buyers want to be assured of the journey and endpoint, not just the starting point today. Lots of vendors can come up with a clever solution that is better than how buyers work today. But coming up with a solution with direction and vision will help you stand apart from the crowd as the nascent market matures.
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