Advice on order of operations (concept/product vs. market/audience)

[Phil K]

So far since reading TMF years ago and only recently re-discovering this community, I've (re)-learned the following:

1.) Don't follow your passion - Follow market needs. (check.)
2.) Don't follow money. Money is like a finicky cat. If you try to catch the cat, it will run from you, but if you sit down with a nice big bowl of tuna, the cat will come and sit in your lap. Offer the market what you know the market wants. (got it.)

My question now is the following:
What is everyone's opinion about the order of operations when starting a new venture? Do you:
- Find a market to sell to first, THEN figure out what to sell them? OR
- Think of a product/need/service first, then figure out who to sell it to (and how)?

I've read/heard a fair amount as it relates to this topic; Most sources claim it's much better to find a market first. The source that comes to mind off the bat is the Gary Halbert letters "find a hungry crowd".

I can't necessarily disagree with that logic at face value. The trouble is though, I can't help but think about how companies like Uber were started ("Wouldn't it be cool if a limo was waiting for me outside right now?"). Or how about "think about what you're frustrated with - you're probably not the only one with that problem". Or what about Steve Jobs who was known to say "sometimes the customer doesn't know what they want. Sometimes you have to show it to them first."

I'm curious what others on feel about the topic, or what their experiences have been in starting their own businesses. What do you think?

Thanks in advance!

 

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[Jsoh]

1.) Don't follow your passion - Follow market needs. (check.)

I do agree with this. BUT, you can still be passionate about what you do... We've seen people MAKE markets that don't exist yet, but the probability is just a lot lower of a success ratio. It can be done, but if there's already a market and there's competition then there's already money being made and transactions happening.

The source that comes to mind off the bat is the Gary Halbert letters "find a hungry crowd".

I think the majority of new entrepreneurs have been conditioned that in order to be happy you have to do something that "you love", but as businessmen / women you ultimately want to find things that can make you loads of money and minimize your risk.

And a lot of times I think people end up loving (or at least being happy with) what they get in with as long as they are growing their business (and making money) otherwise doing something you don't like kinda just sucks.

Cheers

 

[astr0]

I've read/heard a fair amount as it relates to this topic; Most sources claim it's much better to find a market first. The source that comes to mind off the bat is the Gary Halbert letters "find a hungry crowd".

I can't necessarily disagree with that logic at face value. The trouble is though, I can't help but think about how companies like Uber were started ("Wouldn't it be cool if a limo was waiting for me outside right now?"). Or how about "think about what you're frustrated with - you're probably not the only one with that problem". Or what about Steve Jobs who was known to say "sometimes the customer doesn't know what they want. Sometimes you have to show it to them first."

Start with a need or a problem to be solved. Then check if the market for this need exists and how big and hungry it is. Then figure out the solution and check once again if the market is happy with it and is willing to pay for it. Starting with your own needs is probably the easiest way.

Steve job path is also fine, but much harder and riskier. You have to think really big and be right about that. And it takes time and money to have customers understand that they need your product.

 

[Andy Black]

1) The Mother Theresa quote in my signature.


2) “Follow demonstrated cashflows.” (From www.tropicalmba.com/services I think...)

What are people already spending money on? A market is a demonstrated cashflow, not a demographic.

 

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