Don’t just try to steal a share of the existing market, create a new one Oct 19 2009
12 comments Latest by anistock
Target people who have never used a product like yours before. (It’s what Clayton Christensen calls “competing against nonconsumption.”) These people don’t know a solution exists or the ones they’ve tried were too expensive or confusing. These folks aren’t picky (yet). They just want something simple that works.
That means you can win by creating something that’s good enough to meet these basic needs. There’s always more customers on the low/simple end than the high/expensive end. (The low/simple end may not demo as well to the press at a trade show, but it’s what a ton of people actually want.)
Three examples:
1. Nintendo goes after people who aren’t using other video game systems. While Xbox 360 and Sony one-up each other trying to reach experienced, demanding gamers, Nintendo goes after newbies. The Wii’s controller makes video games so simple that a three year-old can play it. And the company is thriving because of it.
2. The Jitterbug is a cell phone created for senior citizens and others who find traditional cell phones too complicated. While fancier phones offer tons of features and apps, the Jitterbug stays simple and focuses on what its demographic cares about. The phone has a large screen and keypad, offers a landline-like dial tone, has an extra powerful speaker, is hearing-aid compatible, and there are no contracts involved.
3. Nearly half of all undergraduate students in the US now attend community college. Why? They are more affordable, have more lenient admission standards, offer online degrees, and focus on market-driven degrees aimed at nurses, firefighters, law enforcement officers, and EMTs. All that means they are able to enroll students who otherwise might never wind up in a classroom.
If you build a simpler, more affordable alternative to what’s out there already, you can bring new people into the fold. You don’t have to grab a piece of someone else’s pie — just bake a new one.
Related: How Obama targets nonconsumption [SvN]
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12 comments so far
Julien GENESTOUX 19 Oct 09
That is indeed an interesting approach, however, it’s also riskier in the fact that you don’t know in advance if the market you’re addressing actually exists… (one ca argue that a if the market exists, then, the risk is the competition)
Paul 19 Oct 09
Interesting post. It is actually a nice tactic when you consider Internet growth – specifically, more and more people with a non-technical mindset discovering solutions for things in their daily lives on the web.
NJC 19 Oct 09
Great post, couldn’t be more perfectly timed and relevant to a conversation I just had yesterday with our CTO .
Thanks!
Ben Ackles 19 Oct 09
Creating new markets is often referred to as “Blue Ocean Strategy”.
Kevin Holesh 19 Oct 09
Targeting first time users is also a great way to cultivate evangelists. These people will become loyal to you if you really put out a simple and useful product. They will be 100% behind you and your brand if you solve a problem in a way they didn’t think was possible.
maureen 19 Oct 09
Julien—market and user research should tell you whether the market actually exists and help mitigate the risk.
David S 19 Oct 09
Great strategy…as long as what you create is not simply a solution in search of a problem.
Your 3 examples, however, are good ones, since they are founded in reality—i.e., actual real needs demonstrated by real people. Reality, not hype.
Dave Driesmans 20 Oct 09
I have the idea that however basecamp might be a pioneer in its field, it mostly has a consumer base that is already (very) organised and thinking about how they can organize themselves better. But that it can’t reach the businesses that need it most?
Modesto Hearing Aid Guy 20 Oct 09
You present some really great examples to support your theory. Lot of research went into those however, to make those successful. They didn’t just use a product and target a different audience. They came up with completely new products to serve that market.
patrick 20 Oct 09
Flip Video
Kyle Faber 20 Oct 09
dan d. – actually, i think the basecamp software is very targeted towards those with little to no organization. i say this because myself and our company uses the software, along with backpack and highrise as well.
we were a small 2 person company who quickly went to 5, and it was imperative for our team to be streamlined. emails was too wild and hard to keep track of, and so we were ecstatic when we found 37signals and signed up for their products. and so, great post, and way to not gloat about the success youve had personally – it lets me do it a bit more for you!
w
anistock 21 Oct 09
baking a new pie can be risky, difficult to identify any niche or take your product to a different space. This is a very good post and food for thought
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