You now have a value proposition and well defined target customer set that you believe has a high need for your solution. Before you move forward you need to determine what the customer’s alternative solutions are. Is someone already providing a solution to this problem that directly competes with you? If so, then there are several questions you need to ask yourself. But for now, let’s stick with a situation where there are no obvious alternative solutions that compete directly with your plans.
You need to ask yourself how people are solving the problem today. Don’t say that they don’t have a solution because they do. They are finding a way to live with or to mitigate the problem. This is your current competition and it is what you will have to displace.
To do that you will have to create a new category of product or service in your customer’s mind. Said another way you will have to educate them that this new category exists. They are not looking for it because they think they have to live with what they have. You have to interrupt their train of thought and get them to pay attention long enough to show them they have a problem they didn’t know they had.
This can be an expensive proposition to go through in terms of both expense (in advertising) and calendar time to break through. You must ask yourself a) is it compelling enough to get the customer to stop and pay attention, b) do I have enough dollars to establish that position in the customers’ minds, c) does the money spent provide and adequate ROI, and d) do I have a way to capitalize on the money I will spend to educate in a way that keeps other companies from capitalizing on MY expenditures?
To lock out other potential competitors from cannibalizing your educational efforts you either need to move extremely rapidly in educating the market, b) have a patent position that protects your interests, or c) have a technology advantage that provides a clear time advantage over potential competitors.
Traditionally, entirely new product categories have taken on average ten years to reach maturation. This is true for refrigerators, desktop computers, television sets and many other products. In today’s hyper-accelerated Internet society it appears that the adoption curve has accelerated dramatically. This is especially true of online services delivered by the Internet. Many companies have chosen to drive to rapid adoption using “free” as a tactic because of the low marginal cost of production. While this may be a good and valid strategy one must realize the difficulty in changing customer behavior down the road when you seek to institute a pay for service model. Consider this one carefully.
