Entering a new technology based B2B business – Part IV

B2B, differentiation, Marketing, niche, segmentation, Technology

Identifying the addressable market

In marketing there is a statement that is thrown around a lot – “find a niche in the market”

This is a very powerful statement. It clearly helps to identify a piece of the market , that you can “own”, if you are successful. It’s always better to own a small pond than to be a small fish in the ocean. Even P&G which has multiple billion dollar brands in its stable, has clearly identified niches for each of its products. So the statement is absolutely current.

I will just like to put a small caveat to the statement and make the statement read – Find a niche in the market and also find if there is a market in the niche.

Let me explain this with a real life experience. When I had just joined a company, fresh out of University, I was given a product which was basically about selling process control equipment . It was a very sophisticated product for its time. We created a solution using this product which we executed on a couple of sugar plants, very successfully. So I was given the responsibility to go out in my territory and target all the sugar plants and sell this solution, because we had found a “niche” in the market, which others were not targeting.

The solution which we had executed, was done on a very large sugar plant, while most of the sugar plants in my territory were small capacity plants. In addition these plants didn’t even have electric panels in the boiler room, so how would they even install such a sophisticated process control equipment. (This led me to create a Maxim for myself – if there’s no road in the town that you are going to sell, you don’t try to sell a luxury car.)

Coming back to the topic at hand – what I realised was that we had a niche in the market which none of the other process control companies, at that time, were targeting, but the market was just made up of 10 odd companies that we could sell to. No one else could afford us. So eventually we wasted a lot of energy and eventually got out of the market.

So now whenever we talk about identifying a niche in the market- in which we want to target our product or service – I want to always check how much is the addressable market. Combined with the questions that I raised in the first 3 parts of this series, if you don’t find an answer to this question correctly then you will waste a lot of time and money.

In the technology based businesses, especially if you are getting in a new technology, you also need to identify if there are enough companies who are using the earlier version of the technology or if there’s requisite infrastructure to incorporate your new technology. To give an example of this, if you are bringing in a SaaS product, one of the pertinent things to check out is – do they get enough network bandwidth across all their offices, so that they can utilise a SaaS based model. If you are trying to sell this product where network bandwidth infrastructure itself doesn’t exist, then even if you have identified a niche in the market for your SaaS product, you won’t be able to succeed because there aren’t enough companies who have the bandwidth to utilise the product.

This is a critical piece in planning your marketing activities. Let me know how you go about identifying the addressable market.

Till next time then.

Carpe Diem!!!

P.S: In case you would like to get my checklist for launching a new technology based product or service in the B2B market, drop me a message.

Entering into a new technology based B2B business – Part 3

B2B, Marketing, Technology

In this, third part of my checklist, for launching a Technology based B2B business – we will look at figuring out how is the customer presently solving the problem. If you are reading my blog for the first time, I would suggest , you read Part 1 of the checklist and Part 2 of the checklist to get a better picture of the process.

That will give you a background to my thinking process and see whether it resonates with your thinking.

Companies find solutions to the problems they are facing. So even though you may have a unique product/service, they may not find it useful, if they are already solving the problem in a different way. It may not be the most elegant, it may not be the most efficient, but nonetheless it is still solving the problem for them.

Knowing this is important because as Perry Marshall says – if its not a “bleeding neck” problem, people will not move to solve it.

In a B2B scenario, this is all the more important, because there is an inherent inertia in the case of B2B. This could be because of the fact that the person responsible does not have the “power” within the organisation, or it could be because she has been given other priorities by her boss and she is trying to close those first or a plethora of hundred other things.

Another issue for the inertia , is the allocation of budgets in B2B. Most companies work on a budget which gets decided at the beginning of the financial year. Generally new things are not incorporated into the budget in the middle of the year, until and unless it’s critical.

So let’s assume that you have understood the “how” the person is solving the problem. You now need to figure out if your solution will give them incremental improvement over the existing solution or will it be dramatic.

If your solution is just incrementally better, the next issue is to figure out the amount of disruption your solution will cause to the existing process and the cost of your solution. If the improvement is incremental and the disruption is large and the cost is also considerable (relatively) then the chances of you being able to sell your solution are very limited because of the lethargy I listed above.

On the other end of the spectrum, if the solution can cause dramatic improvement in the way the problem is getting solved and the disruption to the existing process is also not much, then you may get some early adopters. If you succeed with the initial prospects then you can document the success and take it to others.

There can be many ways to skin a cat, I have shared mine above. Test it in your environment and if you think it suits you, please go ahead and use it. If you succeed, I would be glad to hear about it.

Till next time then.

Carpe Diem!!!

P.S: If any of you , is however interested in receiving my 12 point checklist right now , to help you plan your marketing strategy for a new launch, just message me with your email id and I will send it out to you.

Importance of the ecosystem in marketing

Marketing, Marketing Ecosystem, Product Management, Technology

I have been harping for a long time, in case you are coming out with a new product/service in the market, you need to check for the availability of the ecosystem in the technology market space. So if you are Google or Facebook, you cannot expect to enter or dominate the market if there is no internet connectivity.

I have also written earlier about how Thomas Edison was among the few people who had systematised the concept of testing in his New Jersey Labs . There were hundreds of people testing various aspects of his inventions in parallel. He was not testing things serially which is more time consuming.

Incidentally while the light bulb is attributed to Edison, there were at least another 20 odd people who were building the light bulb at the same time.

What is important to remember is that Edison understood the concept of the ecosystem for the success of the light bulb. If there was no electricity, the adoption of the light bulb would not happen. I guess his experience of working with the telegraph company, had given him this background.

For those of you who don’t know Edison was also among the original promoters of what we know today, as the General Electric company and it was called the Edison General Electric. So while the light bulb was being designed, they were also designing the electric network that would get the electricity to the homes of the people so that there would be an immediate market for his invention.

Edison was the perfect marketing / business person who understood that the ecosystem is most critical when getting a new concept into the market.

Even today, there’s so much noise about different technologies that are hitting the market. What is important for the technologies to succeed is the infrastructure or ecosystem to be present in a very stable condition. If the ecosystem itself is shaky then you won’t be able to get the new technology launched successfully. This is one of the most critical lessons in product management which people miss.

Till next time then.

Carpe Diem!!!

Marketing is Education – Part 3

education, Marketing, Methodologies, Technology

In this part today we will look at another set of great marketing successes who have used education as a method to differentiate themselves and made me their customer.

Example 1: Jay Abraham. I referred to him in the first part of this series. He is big time into giving away knowledge free of cost. There’s so much knowledge which I have gained from him, that when I could afford I started investing in his programs. Due to him I learned that there are only 3 ways to grow a business. The strategy of pre-eminence. The marketing Parthenon etc.

Example 2: Motilal Oswal.This is one of the biggest brokerages in India. When I was starting to learn about the stock markets, I read a lot of the Berkshire letters to the shareholders by Warren Buffet. I read a massive amount of books on the subject. The only challenge was that all the content was international. I was looking for content specifically for India.

That’s when I found the Wealth Creation studies that have been authored by Raamdeo Aggarwal each year for the last 20 odd years. These studies don’t talk about their company at all except maybe for the methodologies they use. Due to that, you gain trust.

When I read those twenty odd reports, I was able to understand the Indian stock markets. So when I had to choose my brokerage, I chose motilaloswal. There were others who were offering cheaper options but because I had trust in motilaloswal, I took them.

Its however difficult to create pure education based content and put it out. Even though I am so much in favor of creating educational content around your offerings, its especially tough when you are in the technology space where there’s so much happening. So I also struggle to get this to happen.

Having said that, I would still think its the best way to build trust with customers.

Till next time then.

Carpe Diem!!!