How to build a company in an untapped market

Being early to an idea brings a particular set of challenges for founders. A startup’s path is better defined when a new product takes aim at an established sector: You need to be at least ten times better, cheaper or faster than anything else. Investors understand this type of company well, and the funding requirements are typically much higher because it takes more money upfront to quickly build a disruptive technology to go head to head against the large market incumbents.

However, it’s more of a slow-burn approach for developing markets. Rather than focus on the competition, startups trying to define themselves and their specific new and not fully defined market category at the same time, need to focus on understanding their customers first and foremost.

That’s often easier said than done. Many times, you’re dealing with an undiscovered need. It’s different than buying a piece of hardware to replace one that is too slow or expensive. Potential customers may have problems that will lead them toward your product, but initially, they may not even know that they have a problem.

Seek to Understand

The starting point for founders in untapped markets requires careful listening and questioning. For example, “What are the dynamics that shape the market?” is a more productive question than “Who are the competitors?” Once again, it’s a thoughtful process. You have to be extra careful because you don’t want to invest a lot of money in one direction only to realize you built something one way when the market went the other.

You never know how many people are experiencing the problem you plan to solve until you talk to them. Doing so will let you know if your potential customers are actually experiencing what you think they are. By talking to those experiencing the problem you’re trying to solve, you’ll see if it’s something they themselves recognize. If they do, you know you’re on the right track.

As a proverb and parable fan, I liken this stage to the story of the blind men and the elephant. Each person describes the elephant based on their limited observations, but the truth lies in the collective experience. By asking probing questions of customers, analysts and experts about the business and technical challenges in a particular market, you can get a more accurate sense of the larger picture.

Keep It Lean

There’s actually an advantage here for founders in more nascent industries: They’re not under tremendous pressure to demonstrate growth. Remember that there’s no need to spend money on unnecessary marketing or branding when you have yet to learn who you’re marketing to. Instead, save every penny you can and invest it in your business. Build a product or service that has what it takes to keep customers coming back. If it doesn’t, you can learn from your mistakes and make changes before anyone is the wiser.

Stay away from vanity growth metrics and focus on more relevant questions like: Where will I find customers? How fast is this market growing? Does my product idea fit here?

Work Your Network

Because competition isn’t a driving factor early in your journey, you can feel free to network with people who have similar businesses and those in adjacent industries. Through networking, you can see if anyone is in a position to promote your business for you or give you product feedback at these early stages.

For these new types of markets, I like the proverb, “If you want to go fast, go alone. If you want to get far, go together.” Those in your network can give you a good indication of where you need more information, and which aspects of your business are resonating.

The Slow-Burn Approach

Starting a company is no easy feat, but it’s even harder in a market filled with uncertainties. Some people are better suited for the accelerated style of company building, with its race to build something ten times better than the competition. It’s like a fast-burning rocket engine that gets you into orbit quickly. But emerging markets require a more slow-burn approach. You have to aim better with your rocket and burn fuel slowly because you’ve got to get really far with your limited resources.

About the author

Said Ouissal is CEO and founder of Zededa. Zededa offers an enterprise edge cloud-based service that delivers visibility, control, and protection for distributed edge gateways, applications, and networks.

DISCLAIMER: Guest posts are submitted content. The views expressed in this post are that of the author, and don’t necessarily reflect the views of Edge Industry Review (EdgeIR.com).

Article Topics

DevOps  |  edge cloud  |  edge orchestration  |  startup  |  strategy  |  Zededa