Cameroon Domains

To develop a successful product, entrepreneurs need to examine the market in which they want to operate. They also must be able to identify their potential customers and their personal strengths and weaknesses, then structure their business accordingly.


In this lesson, you will learn how to identify markets, how to research your idea, and how to
determine your skill set.
One of my professors gave me some great advice. He said, regardless of your business idea,
the entrepreneur must ask him or herself, “What is the single necessary and sufficient condition for a
business?” It is not a product, a technology, a customer need, a business plan, a vision, a strong team,
investors, or competitive advantage. While all those things are important for a company to have, none
of them is the right answer.
The single necessary and sufficient condition for a business is a paying customer — the person who
will pay your company money for its product or service. Knowing this, how does one identify a need
and business opportunity? The business opportunity is always related to the needs of that
paying customer.
Begin by estimating how many paying customers there are in your chosen market. Digging deeper,
find out where they are geographically, and how much they would be willing to spend on the
product or service you intend to sell.
However, just because you have a paying customer does not mean you have a profitable business. In
order to have a profitable business, the entrepreneur will need to gain enough paying customers,
spending enough money within a relatively short period of time, so that the business does not run out
of capital. These calculations are difficult, and demand quite a bit of research.
How do you go about researching your idea, then?
The goal is to launch a business based on an innovative product or service where no market
currently exists. If your business idea is to sell batteries for mobile phones to residents of your
home city, you will need to do the research, based on what we call market segmentation. You will
have to find potential future paying customers and ask them questions about the batteries in their
mobile phones. Take advantage of the Internet, if you have access, or make connections by talking to
friends and family. Get on the phone or in the car, or walk the streets, to pursue information and
potential opportunities.
Even if other companies might already be selling batteries, the objective is to make sure no one is
selling batteries like yours. If your battery is not better, not cheaper, doesn’t last longer, or
more advanced than existing batteries, then there is no reason to start a new business selling batteries.
However, if your battery is better than existing batteries, provided you’ve done the research to
identify your target customer in order to estimate how much money they would be willing to spend on
a better battery, you will attract lots of new paying customers. You will then have a high market share
that you can use as a basis for future expansion.
How do you determine what fits your own skill set?
You’ve done all the research, based on an approach that we call market segmentation. Now you are in
a position to know your future paying customers. You have an idea of what they like and dislike
about their mobile phone batteries, where they live, where they shop, what jobs they have and their
monthly income. You even have a good idea of how much they might be willing to spend on better
batteries for their mobile phones. But in order to sell lots of batteries to your newly identified target
market, you will need to make sure that target market is consistent with your values, your
passions, goals and aspirations as an entrepreneur.
The ambitious entrepreneur becomes obsessed with the wants and needs of the paying customer. But
he or she must be smart about the role they want to play in the business. If the entrepreneur
is interested in the technology of making better batteries, and good at receiving feedback on how to
improve the battery, then he or she should focus on product development and let other people on the
team concentrate on sales or marketing.
If, on the other hand, the entrepreneur is good at explaining the benefits of the new battery, and
why customers should pay for them, then they should be in sales or marketing.
It takes time and patience to convince new paying customers to buy your product. You will succeed if
you know your market and your own personal skills.