It’s a common problem startups and small businesses have – they are so close to their own product/company/story, that they drink the cool aid. And forget that reality is something outside of the cozy bubble they have created.
In my recent dealings with a startup, the management team sought the low hanging fruit (another cliché, I’m afraid) thinking they identified an unmet need in a large market. Sounds great. But the problem was that no one bothered to go out and actually do some primary research with the market and test the hypothesis. For two months, the team worked under the assumption that this market was just waiting for the company’s product.
Finally, one day, someone woke up and called a few managers in this market segment and got some feedback. It wasn’t pretty. It turns out the market had their own solution to the unmet need and would, in fact, loose tons of ancillary income provided by their own solution if they were to abandon it and go with newco’s solution.
Talk about lost time and back to the drawing board. Two months down the drain and all the marketing and business plan sections had to be rewritten (not that that is unusual even when everything is done correctly). AND they had to re-direct their attention to look for some more low hanging fruit. Fortunately for this company they were bought out before they had to leave the cool aid water cooler.
But how many other newcos, and bigcos for that matter, proceed full speed ahead under their own cool aid bubble?
You will never know all there is to know about your marketplace. But if you never go out and do the research you’ll never know anything about your market. And sooner or later that will come back to bite you – and maybe even cause the whole company to go under.
That’s what advisory boards, colleagues, friends etc. are for. Talk to people who are unbiased and can point out flaws in your thinking and point you in the right direction. That’s also why god created research libraries (like SIBL).
Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.