Key Questions to ask on Market Definition
Let's start with some basic questions one should ask when asked to work on an opportunity:
- Who are the customers?
- What are their objectives?
- How do they do it today?
- What are their pain points?
- What are their options to improve their pain points and what are the concerns or issues exercising them?
- What value, and ideally economic value is there to them in solving these pain points?
- Where are these customer needs alike, where do they differ, what drives this difference, and can we estimate the number of customers along these dimensions?
Friends I have no idea if this is anywhere close to an industry standard definition or a best practice. Surely it is grossly simplified, but that's partially why it works. With these simple questions, I know that if I can develop something that addresses the pain points better than the alternative options, then it might be worth some effort conceptualizing and planning an offering.Markets - an economically significant group of customers (or potential customers) that share common objective, have similar pain points, and have an economic interest to improve the pain points in the short term.
You'll notice I've highlighted some subjective words; "economically significant", "short term", and "better". These are all measures relative to your Market. So to take an extreme example, I suspect Virgin Galactic only needs a small number of customers paying a high price point, short term might be 3-10 years, and "better" might just be having the product available and safe.
Why is this important?
You'll notice that none of these questions have an expression of product or service. One could conceptualize lots of products that address a Market defined this way. I suspect Virgin Galactic would be looking for wealthy, thrill/risk seeking individuals in good health that want bragging rights around a unique experience.
Many (but not all) Product Managers that I have worked with fall into the trap of defining a Product before defining the Market. On the other hand, product or service definition needs to be a collaborative process based on Market needs, but also based on organizational capability. I'll pick this up in my next post.