Run through this thought experiment with me.
- How many mangos are sold in your city? It doesn’t matter how wrong your answer is – a guess will do.
- How much does a mango sell for?
- So what the mango market worth? This isn’t a trick question, just multiply the previous two answer together
- Where is the mango market?
Ok, the last one is a trick question. This is because there is no mango market. There is a fruit and vegetable market.
Mangos sales aren’t significant enough and compete so directly with alternatives that they don’t have their own market. The price and availability of alternative fruit is almost as significant to the volume of mangos sold as the price of the mangos themselves.
Who cares whether there’s a mango market or not? Well, no one reading this. However every entrepreneur should care whether their product or service has its own market or if it is just one small part of a much larger market. It is a common mistake to assume that just because there is a demand or need for a product that the product automatically creates its own market.
This is important because it is not possible to have a go-to-market strategy without recognising the market that you are in. The market dictates where your customers gather, what websites they visit, what conferences they go to, who they buy from, how they buy, the terminology they use, etc..
As a general rule if your ‘market’ doesn’t have an industry conference or any independent trade publication you should be asking if it exists in its own right or is just a part of another market.
Example: There is no flavoured water market – there is a soft drinks market. If you want to buy a bottle of flavoured water you go to the chiller cabinet in your convenience store. The flavoured water competes with all soft drinks for shelf space. If the flavoured water you want is out of stock or too expensive you will buy some other soft drink.
While there may be a demand for flavoured water there is no market independent of soft drinks. If you were the CEO of a flavoured water brand, realizing that you compete directly against bottled water, juice and sugary drinks in their market faces up to reality and allows you to create a credible go-to-market strategy. Thinking that you’ve got your own market is self-delusional.
If there are lots of alternatives that you haven’t included in your market then the chances are you are fooling yourself. There is no point trying to sell to this market because there are no customers there – they are all at the soft drinks cabinet.
- There is no firewall market – there’s a digital corporate security market.
- There is no invoice reconciliation software market – but there is a financial software market.
- There is no wooden puzzle market – however there is a games and puzzles market.
- There is no SMS market – there is a messaging market.