If you are looking to educate the market about a new product or solution you must understand that you are planning to provide a product or service that nobody is currently looking for. People who aren’t looking for things tend not to find them. Fundamentally their mind is closed and you have to work on creating a space where the potential buyer will listen. In today’s market where consumers are bombarded by messages at every turn, this is very difficult.
There are exceptions to this and they tend to run along viral marketing lines. In the late 70’s when I was working at Texas Instruments we introduced a calculator that did conversion from decimal to hexadecimal. Nothing like it existed and the adoption was immediate and swift. The size of the problem was so large, the solution so elegant, the market target so well defined and so communal in nature, that the product took off like a rocket. So you can do it but I would caution that this is the exception, not the rule.
The key thing to remember is that adoption will be slow, marketing expenses will be high, and you had better have a plan to lock out competition because they will wait like vultures for you to educate the market at your expense and then come in on your heels and steal your prospects.
Let me give you one more example of this. In 2001 I was VP of Marketing for PhotoAccess, a startup Internet company providing digital photo storage and print making. In late 2001, we and several others, including Ofoto and Snapfish, had spent significant money educating the market about photo hosting. We had attempted to form a relationship with District Photo who was the largest independent photo finisher in the United States. Wisely, District Photo didn’t bite and instead sat on the sidelines as the flurry of start ups built market awareness. In late 2001, the venture capital market dried up and start ups were forced to sell out. PhotoAccess was sold to Photoworks, Ofoto was sold to Kodak and Snapfish was sold to District Photo. To my knowledge, none of these companies recouped the investment that was put into them, while companies like District Photo got market awareness at bargain basement prices.
Does this mean you shouldn’t introduce products and services if you have to educate the market? No, but it does mean that you better have a plan on how to leverage your investment and maintain your market dominance once competitors come swooping in.
