CEO & Founder @ RefocusEdTech enthusiast, investor, mentor and marketing expert.
Even a seemingly good analysis of supply and demand cannot guarantee that your new product will be a success. However, looking at it from every point of view and analyzing what needs to be included can ultimately save a company money. Here are the steps I recommend you take before launching anything in a new market.
Choose the right market.
The second most common reason for a start-up to fail is its inability to meet market needs, according to one analysis by CB Insights (registration required). Whether you decide to explore local markets or go international from the start, as my company did, you need to do some proper analysis beforehand.
To analyze the market, you should pay attention to open source literature and collect your own data through in-depth interviews. By doing this, you can observe not only the state of the market you are interested in, but also the state of the economy in general, the number of people in the market, internet penetration and so on. For example, my company, which helps people learn new skills and enter the IT industry, looks at the following:
• The gap between supply and demand in the IT sector;
• Gross domestic product per capita and whether our target group had sufficient disposable income to buy our product;
• The lack of major players in the market.
After conducting customer development and item analysis, we chose Indonesia and the Philippines.
Choose the right product.
No matter how perfect your marketing campaigns are or how catchy your advertising materials are, none of them will work if there is no demand for the product. In addition to meeting the expectations of your direct customers, you must ensure that the result they get from your product matches the needs of the market.
For example, in the case of an educational product, the same topic may be funny to your customers, but absolutely useless in the job market. Or it could be the other way around, which happened with a digital marketing course we offered. In the Philippines, where we tried to launch the course, we found that these specialists were in high demand; however, we couldn’t get many leads regardless of the images and pitches we used in advertising. In-depth interviews revealed that the people we targeted were simply not interested in the product.
For the next products we launched, we did a hands-on analysis of demand during the minimum viable product stage, and it worked. We managed to find the balance between ‘interesting’ and ‘in demand’.
Here are steps you can take to help you determine if there is a demand for your product:
1. Conduct market research and come up with a list of potential products that would meet the needs of the market.
2. Create a trial ad campaign for social media, such as Facebook, for each idea. For example, my team created a set of creatives for all possible courses. The visual material and triggers, as well as the target audience, were the same; the only difference was the product name. We then suggested to potential clients to leave their contact details to access the full program.
3. Analyze the data and the lowest cost per lead. Data analysis turned out to be the most effective for us.
4. To substantiate your findings, continue with a series of in-depth interviews with the leads.
Develop the content of your product to make it suitable for the market and audience.
Whatever your company and product, it is crucial to understand that they will be part of an existing system. For example, if you sell toys, the elements of the system are vendors, suppliers, children, and parents.
Simple observation helps you determine who and what the system includes in your case. Consider identifying the key players in your system: Do you need someone to help you create your product? Who buys it? Is the fact that someone bought it important to someone else? How and why is it important? Once you’ve determined these groups, try to consult representatives from each of them and hear their views on whether your product is necessary and how it can be improved.
For example, in the case of offering an educational product, my team knew that the system included students as well as prospective employers. There we go:
1. Researched job opportunities and analyzed the skills needed for junior IT specialists.
2. Talked to HR teams at companies looking for IT specialists. They emphasized the importance of resumes and portfolios, so we focused on that in our offering as well.
3. Consultation with personnel managers. To help our prospective graduates through the hiring funnel, we needed to understand the expectations of the people who hired them.
Doing this allowed us to understand what employers expect from our future graduates and build a product around those expectations.
Do not forget to regularly follow the customer journey yourself.
There is a simple rule that many forget: there is no better way to create a perfect product than to listen to your customer. Ask your community managers to pass on any feedback they receive. To monitor this feedback, hold weekly meetings with your entire product team where you read all feedback and develop potential improvements.
For example, my team noticed that some students were not happy with our original enrollment system because it took about a day. Students found it disappointing, because it happened when they had just bought their “ticket to a new life” but had to wait. Because of this, there was an increased risk of restitution before students even started their education. After realizing this, we started giving students access to classes before asking them to join group chats, increasing satisfaction with the introductory module.
Unpredictable things happen that we have no control over, and they can hurt the sale of a product, no matter how well developed it is. But in general, the more thoroughly you study your target audience, the market and the system into which your product is integrated, the greater the chance of success.