Consumer and business needs and preferences are changing rapidly. Digital technologies have created new experiences and increased customer expectations in almost every industry. This has created challenges for incumbent companies but also created near limitless opportunities for product teams.
A market opportunity is an identified customer need or market trend that hasn’t been fully addressed by current offerings. Organizations can identify market opportunities via industry trend reports, market research, user research, brainstorming, or based on an industry veteran’s intuition. Product teams then seize that opportunity.
The challenge, however, is deciding if a market opportunity is worth pursuing in the first place, and, if so, building the right products and features. Making these critical decisions requires gaining insights about what customers want and using that data to make decisions throughout the product lifecycle. Fortunately, the guests of This is Product Management have shared their experiences and best practices on how to explore a new market opportunity.
1. Jeetu Patel: Leverage your competitive advantages
There are so many exciting new technologies that have the potential to reshape major industries and there seem to be more popping up every year. From blockchain to chatbots to artificial intelligence, how do you know what to focus on?
Jeetu Patel, Chief Product Officer of Box, shares why he decided to focus on artificial intelligence and machine learning and launch a new product called Box Skills.
He started by considering both the macro trends in Box’s industry and his current customers’ needs. Jeetu observed that people spend most of their waking hours at work but that they’re overwhelmed by the amount of digital content that they need to store and find in order to make decisions. He then shares what he believes has contributed to his success in deciding which of many market opportunities to pursue:
“Only focusing on the things that you know you can do better than anyone else in the world.”
Jeetu then emphasizes the importance of timing, focusing on a large market, and starting with a small subset of that market.
“You have to make sure that you go after a large market but that you can attack the market one sub-market at a time,” he said. Once you’ve you’ve captured and captivated a sub-market, move on to more.
2. Saad Khan: Stay one step ahead
You’re familiar with the downfall of companies that fell one step behind, such as Blockbuster and Kodak. These companies fell from the top of their industries to the bottom within years.
Saad Khan, Head of Product at ConsumerAffairs, says products fail because product managers are focused on making incremental improvements instead of focusing on what customers really want. He provides the Nokia Communicator 9310 as an example.
While Nokia was focused on improving the handset, Apple came out with a phone that didn’t have a handset at all. That turned out to be the breakthrough innovation that customers really wanted. As a result, while Nokia lead the market for decades, it ultimately lost the war.
Saad’s stresses the importance of deeply understanding customer needs and building products that are 10x better than anything else on the market.
Saad adds that revenue is not always the best metric to quantify the success of a product. He says you need to get feedback from customers throughout the product lifecycle:
“Without that feedback loop, revenue alone cannot be a product success.”
You don’t want to launch a product, earn some revenue, and then have everyone forget about you, he says. Think big and research continuously.
3. Dan Martel: Maximize the value you provide to users
The cost of building digital products is decreasing and the speed at which product teams can reach millions of users is increasing. In this increasingly competitive landscape, you can’t build mediocre products and expect to be successful.
Dan Martel, CEO of Clarity and Investor in Intercom, Unbounce and Udemy, shares his approach to building successful products.
After deciding on a market to focus on, and an initial customer segment to serve, he asks himself one simple question:
“How can I create more value for my customer than anyone else in the world?”
Dan asks his customers questions such as “if you could wave a magic wand, how would they see their problems solved?” to start learning what he can do to make his product better than anything else that’s available.
This approach is how Dan gained the insights he needed to make the decision to extend Clarity from a scheduling tool into a marketplace for advice. The marketplace model helped him bring on users such as Mark Cuban, Brad Feld, and Eric Ries, and ultimately get acquired.
4. Jeff Morris: Balance data and intuition
From market research to internal stakeholders to analytics, there are so many factors to consider when making product decisions. In addition, you still need to have a vision for the future and use your intuition to decide what products and features to build.
Jeff Morris, Director of Product Management – Revenue at Tinder, strikes a balance between qualitative insight and quantitative product research when launching new products.
People have been dating since the beginning of time, and Tinder is on a mission to connect people. In addition, Jeff believes that the product’s user experience and design are critical to its long-term success. However, when exploring a new market opportunity, he looks to data to tell him what his users really want and improve the product.
Jeff launched the company’s first paid product in just one city, in order to get qualitative and quantitative feedback from users to decide if they should scale it out to more cities.
After positive results in the first city, Jeff was better equipped to make the decision to expand to more cities. He continues to analyzes metrics such as new subscribers, renewals, and churn to measure success and make optimizations.
Seizing your market opportunity
Jeetu, Saad, Dan, and Jeff provide mission-critical advice on identifying and seizing a new market opportunity. Choose a small portion of a market to start with, conduct quantitative and qualitative research to learn what your users want, and leverage your competitive advantage to build a product that’s 10x better than anything else in the market.