A good idea and skillful execution are not the only things required to successfully introduce an innovative new product. It is also crucial to identify a good market.
Harvard Business Review contributor Rob Go explains this important factor in a recent article. He notes that, contrary to popular belief, a good market is defined by more than rapid growth. Sometimes, these factors make them especially unattractive.
"There are some very big markets that are fundamentally unattractive, especially for start-up companies (for example—music)," he writes. "There are also some markets that might be stagnating but present the perfect opportunity for startups to be disruptive (was anyone marveling at the growth of the eyeglass market before Warby Parker?)"
Growth alone does not tell the whole story about a market. For that, entrepreneurs need to look at trends, especially "mega trends." Some, like the shift toward mobile devices, are relatively easy to spot after a fashion. Plenty of others do not make headlines, but they are no less effective. The best innovators seize upon these opportunities and develop ideas to take advantage of them.
It is also important to look at what Go calls "moats." These are the barriers to competing in a market that can determine how popular a product or service remains after its introduction. Social networks and other web applications are notorious for having little in the way of moats, since users are often more than willing to leave and try the next best thing. This factor is crucial to any business plan.
Part of our development process at Sozo Design is to assist our clients to be the best in their respective markets via disruptive innovation or to successfully create a new market full of opportunities.