In exporting experience counts for everything, right? Not always, cautions Nick Egerton from The Icehouse.
In today’s fast moving world, market conditions and customer tastes change so quickly that data wins over gut instinct.
This is especially so when deciding to enter a new offshore market, with the associated risks in money, resources and the opportunity cost of getting it wrong.
Referenceable data and current information is the currency, not what I think or think I know, and using multiple data sources will help avoid falling hostage to a few select insights.
Fortunately, there are numerous user-friendly sources of market insights available. For example, in May Facebook released a new free resource for people researching SMEs business confidence, hiring intentions and even use of online information. The ‘Future of Business Survey’ draws on nearly 200,000 SMEs in more than 40 countries and is interactive, allowing comparisons to be drawn between companies of different size and industry across multiple countries.
Reviewing the survey tool caused me to reflect on the importance of the ‘ready’ phase in the ‘ready, aim, fire’ market entry model created by Rob Adams. The pressure is on New Zealand exporters to see new products in market, but patience is a virtue when it comes to validating the opportunity.
To recap on the three phases:
Ready – this is about deciding whether the objective is worth pursuing. Use all available online sources including social media and traditional media and research reports from government agencies or industry bodies. Avoid relying on a single source, and cross reference with alternatives to test and challenge what you’ve learnt. Authenticate the sources – investors or your Board may want to double check the assumptions.
Comparing an idea to the macro trends is another way to strength test it. If an idea goes ‘against the grain’ of the underlying trends in consumer tastes or technology models, then interrogate it that much more.
Understanding the true competitive landscape is difficult when competitors are not obvious or do not provide an easy comparison. Unpacking the real competition requires searching for non-obvious alternatives to your product. This is where checking in with experts or other commentators in-country is most helpful.
Aim – this phase is about testing your hypothesis with potential customers and should be allocated the most time. This is ideally done in person and sufficient lead time is required to set up calls or meetings in-country.
The value of this process lies in finding the unique customer insight and truly understanding the target. Are you aiming at the bull’s eye, the outer rings, or just the side of a barn? This means testing the pain points that you hope to solve, understanding what solution the customer is using, and what value they place on solving it.
There really is no substitute for direct interaction – an online survey alone will just not cut it. The upside though, is that this time also contributes to building an early stage customer pipeline. Every conversation with a potential customer about quantifying (and solving) their pain point is an opportunity to uncover interest in purchasing special features.
This period can be especially tough for sole entrepreneurs and is when advisors come into their own.
The ‘aim’ phase can be a roller-coaster of emotions when the opportunities for a new product appear and disappear like mist in the trees. Often the information can conflict; the online research points ‘South’ and the interviews point ‘North’, and another round of testing is required. Luckily that contradiction was found before you pressed the ‘Fire’ button.
Fire – this is where it gets real! The time and effort put into understanding customers now pays off, but for any new product, the hard work only starts, not finishes, when it launches. Set expectations among your investors and team to commit to iterating the prototype, or Minimal Viable Product, continually responding to customer feedback.
Throughout the process of building, selling and iterating the MVP, don’t lose sight of those key information sources to stay across macro trends and what the industry influencers are saying.
Nick Egerton is Principal in Market Validation and Commercialisation at The Icehouse Business Growth Centre.