Finding the Right Target Market Can be Messy

Despite what you may find in popular culture, a successful entrepreneur is not one that forces the world into the vision they have for it, but one that recognizes a huge underserved market need and figures out how to tap into it. It's just a reality that no entrepreneur can overcome with shear will power or intelligence. Product-Market fit is necessary for any high growth company. But let's face it, humans are not omniscient. It's impossible to develop the perfect solution staring at a whiteboard with your colleagues. That's why customer discovery exists. It's an iterative process of trial and error and like any iterative process going through it is extremely messy. One minute you feel like you've discovered gold and the next you feel roadblocked and confused. It's okay, it's actually to be expected. As Chuck likes to say "Some people choose to go on the merry-go-round, we chose the rollercoaster."

A wonderful case study of this process can be seen by one of our 2018 companies, Automation Intellect. When A.I. first came to StartFast in May, they had a potential solution for any kind of widget manufacturer, or "discrete" manufacturer to use the industry nomenclature. Essentially they work with a customer's automated machinery and are able to pull tons of operational data that can be used to improve machine performance. We love it, but when it comes time to create a repeatable sales model, a number of very important questions arise:

What industry are these manufacturers in?What size and type of company are they?How do you identify which companies are early adopters?Who within the company is the actual customer?What type of equipment is the best use case?What is the actual business value the customer sees?What are they doing now? Why is that not a good solution?

Determining the answers to these problems is exactly what Customer Discoveryis for. That doesn't mean we stopped selling. What it means is we took every opportunity to learn about the customer, the market, and pattern match where the successful outcomes were. Every time the team had an interaction in the market, we were testing hypothetical answers to one or more of the above. When patterns arise, we revised and narrowed those hypotheses to greater levels of specificity and tested again.

The results? Today, AI helps mid-size automotive and plastics manufacturers with their continuous improvement plans by increasing the efficiency of their automated assembly equipment. Currently, in order to gather data and determine how to improve & maintain strong "Overall Equipment Effectiveness" requires a team of engineers with clipboards (not joking) to collect and interpret raw data. A.I. solves this problem by pulling data directly from the machine's computer and providing insights to the manufacturer's operations manager about how to improve machine performance and cut costs. It's taken 7 weeks to narrow down to that level of specificity and we aren't finished yet.

The process of getting to this point can seem very chaotic especially on the inside. You may spend days or weeks working hard to test a market segment only to find it isn't working as you thought, scrap it, and start all over again with a different market all together. As long as that decision was made using objective market data, there is nothing wrong with that whatsoever!

In fact let's run an alternative scenario. Say you didn't do that and you just took a $1M investment. How much worse would you feel having to answer to those investors after having spent all their money on a fools errand? That's why this process is so important. The fact that it is messy and feels chaotic is simply the nature of the beast. Don't let that slow you down. Embrace the adrenaline rush when you discover something new, interesting, and surprising because that's your real competitive advantage. The market winner in the 21st century is not always the company with the best IP, it's the one who can execute this process the fastest, arrive at concise answers to those questions above, and then figure out how to scale.

Meet Coach Jim Boeheim at Demo Day 2018!

Register Here

James Shomar
Stay In the Loop
Subscribe to our newsletter.
Privacy Policy
 | Copyright © 2023 StartFast