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Segment your Market



You need to focus - especially early on.  So choose a first segment.

Sharper segment focus means better sizing (and a more focused company)

What segment will you target first?  Why? Consider:
          Profit potential
          Fast adoption
          Ease of sales
          Barriers to competition

What follow-on segments can you pursue later (increasing your total avail. market)?What type of customers are you going after?

Business or Consumer?

Consumer
          Segment by: demographics/lifestyle/values/interests/life stage
Business
          Enterprise
                Global 2000/SMB/Small office /Home Office
          Service Providers
                Internet/hosting/etc.
         
If Business focused - Horizontal or vertical?


Vertical: focus on specific industry; typically need to pick 1 or 2 to start

  • Which have biggest need? Which are early adopters?
  • Timing?  How fast does this vertical adopt new tech?
  • How easy is it to sell to this vertical?


Horizontal: solution that applies to multiple industries

  • How will you focus?  You probably can't address an entire
  • horizontal  opportunity on day one.

What sales approach will you use? (Different discount levels will affect your revenue assumptions):

  • OEM sale?  Buy pieces and put your logo on it
  • Value Added Reseller - sell you integrated services
  • Retailers

What products/segments in solution stack will you provide?

  • Customers buy all pieces of the solution; how many come from you?
  • After your initial beach head segment, what segment/capability you add next?


Regional focus?

  • Will you focus locally initially?  Or focus on the U.S. initially?  Then where?

Market Validation

You're always validating your market segmentation and market sizing.  You'll collect secondary research data to validate the overall sizing.  And you'll do primary market research (i.e., talk to and/or survey actual customers) to understand who will buy, how they will buy, and what they will pay. Eventually, you'll start selling your solution, which is perhaps the ultimate in market validation.  You do all that the validate the assumptions you've made in developing your market sizing.

It's the combination of the primary and secondary research that will give you confidence in your market segmentation and sizing - and the confidence to select the best segment to tackle first.



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