We continue our series of "homilies" on the entrepreneurial process by getting at the second of our six components. To review, I’ve summarized the entrepreneurial process as six questions plus an imperative. Here they are:
1. What do I/we [i.e, you or your group/organization/venture] have to offer?
2. What needs are there in the marketplace that I can address?
3. What is a creative solution to meet that need?
4. Is my solution financially and logistically feasible?
5. How shall I implement my solution?
6. Deliver with an unwavering commitment to excellence.
So let’s get to #2. Once you have a sense of what you have to offer, the question remains: how will you translate what you have to offer to a marketplace that wants what you have – and is willing to support it with their money, their attendance, their commitment? Part of answering that question is to gain an understanding of the market you wish to reach: Who are they? Where do they reside? What are their characteristics? But while this information is useful when it comes to strategies, it’s meaningless without also understanding what they want.
You see, every one of us is a bundle of needs. Some of them are universal: the need for food, clothing, and shelter. Some of them are very particular to us as individuals (my continued quest for good Bar-b-Que outside the state of Texas, for instance). Others – like the human need for connection, community, and engaging with things that take us outside ourselves (like art) – are more abstract and can be difficult to pin down. But whatever we’re talking about, we have needs. There are a lot of ways to determine what these are. For instance, you can gather data from groups you’re interested in reaching (through surveys, focus groups, etc.). This can be useful, but many successful entrepreneurs will tell you that the best way to identify unmet needs is to simply draw from your own experience – particularly in, but not limited to, your field of expertise: if you’ve noticed something that needs to exist or could be done better, chances are you’re not the only person who feels that way. As one Boulder entrepreneur put it to me: "What pisses you off?" We build on this idea in our entrepreneurship class at CU-Boulder, where students keep a "Bug List" of things they observe in their everyday lives that they wish were done differently (or perhaps needs that are entirely unmet at present). These lists often yield genuinely viable ideas for entrepreneurial development -- without any reliance on expensive market research! In the end, our own observations and perspectives may be our most valuable commodity.
Research supports this as well: there’s a body of literature built around the idea that most entrepreneurial ventures start with an individual or team who identifies needs in their own field of expertise and experience and then utilizes the resources at hand to create a solution. (If that concept intrigues you, we’ll talk more about it during the implementation piece of our series.)
So that’s the first part of this step: the Need. The other part is the Market, and if you’re not familiar with business or economic terms that might sound like an intimidating word. But it’s really pretty simple. See, there are often lots of folks with the same need, and that’s all a market is: a group of individuals with similar tastes and desires. And here is one area where there's no substitute for some good research, because cold figures can be a valuable reality check for our ambitions. When we're pumped up about an idea, it's easy to fall into the trap of believing that everyone else will be as excited about our idea as we are. But that's rarely the case. Fortunately, the internet is an extremely useful tool in doing some research into other products that may already be out there, who is buying that product (and in what quantities), how many people exist who meet the profile of whom you're trying to reach, and where they live, how much they earn, etc.
If you're coming up with something completely new, however, this process of determining the size and characteristics of your market can be difficult. Sometimes the best you can do is make an educated estimate based on whatever data you can access. But the most valuable aspect of this process is simply to get you thinking in terms of your product or service and how it connects to people. I can't tell you the number of times I'll see a proposal from established arts groups who will answer the question "who is the audience you seek to attract?" with: "everyone!" Well...no. There isn't an art form out there, even the most massively popular, that attracts everyone. And to tell yourself that you seek everyone is a recipe for not reaching anyone very effectively. That said, there is hopefully some sort of market/audience for your product that LOVES what you do -- or would if they knew about it. Identifying those people first is the key.
Once you’ve got a market -- and insight into what it wants -- you can begin to match that want with what you have to offer. This process of connecting what you have (your artistic product) with a market is where creativity comes in: how will you make that connection in a way that is unique and valuable to that market? We’ll talk more about that next week.
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