I was invited to speak to a class of entrepreneurs of the Kauffman Foundation FastTrac program at the SUNY Levin Institute in New York City this month. The topic was ‘the most important lesson I have learnt as an entrepreneur’. My answer was the lesson to ‘know my market’ before launching a venture.
This simple lesson seems obvious, yet subjectivity often clouds common sense, and this results in the important step of market validation being overlooked.
Some entrepreneurs who pitch their startups to us at KAYWEB Angels, or to other investors, believe in their product so deeply that they only ask the questions they have prepared for. Moreso, when we ask further questions to determine validity, they sometimes become defensive and launch offensive answers rather than taking on the points presented by seasoned professionals.
Many use this bias as their metric system, and resolve to spend many dollars and hours developing something that their target group does not take to.
These entrepreneurs, who have usually been rejected by more than one investor along the way, then use face-saving excuses like ‘my product was ahead of its time’ or they blame somebody else when eventual failure occurs.
While there is no sure thing in business, there are ways to be ‘surer’ when entering into a venture.
Market validation, by way of surveys, interviews, panels and meetings, will help you get to understand your audience and know your market.
Information gathered from such activity is priceless. Typically, the people who answer your surveys and influence the end version of your product will become the earliest adopters of it, and your volunteer evangelists.
Moreover, you end up moulding your product to your market’s needs, increasing your chances of success.
I learnt this lesson watching the failures of people close to me and feeling guilt for failing to advise them to test their market before they spent their dollars and our hours. I wish to pass on this very important lesson to any entrepreneur I meet – KNOW YOUR MARKET and be ‘surer’!