It’s easy if you’re in an Existing market – customers know there’s a market, customers can tell you what the basis of competition is, and you have a product better than incumbents on the metrics customers say is important. In this case you spend every sales and marketing dollar you can get your hands on to take market share.

The problem is that every startup instinctually acts like they’re in an Existing Market. They prematurely scale sales and marketing spending before a market may even exist. Therefore the first step is to figure out whether customers know about the need for a product like yours – is there a market. And if not, can you position your product so it addresses a niche of an existing market (resgmenting) or do you have to create a market by yourself (New.)

Does this help?

steve

People will talk about things in person that they’ll never come up with, not on Uservoice or GetSatisfaction, not even if you schedule a conference call just to get their feedback.

I would be walking the cubical halls and someone would poke their head out: “Hey you’re the Smart Bear guys!” “Yeah?” “I’ve been meaning to ask you something….” This guy would never have picked up the phone.

As another example, I could see which magazines are on people desks, and that tells me where to advertise.

I can make similar comments about watching people use your product.

There’s certainly nothing wrong with gathering feedback any time you can, and travel expenses are rough right now so you make do.

But there’s nothing like in-person interaction to find out what your startup/product/messaging REALLY should be.

I’m still wandering between resegmented niche and new market for my startup.

Other vendors had hardware devices to play music, but only Apple realized that it was the entire ecosystem – getting the labels signed up, having an easy to use on-line store to seamlessly download, the notion of syncing music from your computer, and then finally the hardware. Apple created a New Market which wasn’t about you buying another hardware device and figuring out how to rip and burn yourself. The point about the Market Type is that there were no users or vendors who were doing this. There was no market for doing this. It was something completely foreign and new. Users had to learn about iTunes and its relationship (and value) to the iPod. Apple’s marketing at first was about educating you about the ecosystem of doing something new.

Fast forward to today. Today the iPod market is an Existing Market. Users understand the ecosystem. Demand creation for subsequent iPods can be about the features not about the new idea of iTunes+sync+iPod.

The iPhone had the same story. Hardware device, sync, store. Lots of other vendors made hardware sort of like it, but when they opened up the App Store they created an entirely new device. For the first time a handset vendor is calling the shots at the carrier.

hope this helps,

steve

I would consider the iPhone a resegmented market as there were already smartphones. Ditto with iPod with mp3 players (but with iTunes).

I hope I’m not splitting hairs

Folklore has some interesting stories about Burrell Smith (http://bit.ly/joRaK). Here’s the quote from that page: “Burrell Smith’s brilliant digital board provided the seed that the rest of the team coalesced around. Its Woz-inspired creativity set the tone for the rest of the project.”