Cheatsheet #2: Pitching a new market
Disruptive storytelling series
This post is part of a series of storytelling ‘cheatsheets’ designed to help entrepreneurs tell disruptive stories. Each one covers a different type of disruption, from products based on new user behavior to incremental improvements like new features or lower price.
Cinderella Stories
In Cheatsheet #1 I talked about ways to tell a story of disruption by focusing on a new behavior your product enables.
But for many products and services, it’s less about what you do and more about who you serve. Having a laser focus on a niche, especially an overlooked one, is a classic startup strategy.
The Apple LaserWriter debuted in 1985 retailing for $6,995. It was targeted to professional designers, a market that Apple felt was underserved. They were right but the combination of the laser printer and other technologies like Postscript and the GUI created a huge new category: desktop publishing.
Starting in small niches can lead to big things.
Top 3 Objections
Your market is too small (or unprofitable)
If your strategy is targeting an overlooked market, it’s natural for people to think it’s overlooked because it’s a bad market. Embrace the ugliness! Talk about why it’s so difficult to serve this market.
Then explain how your product turns something ugly into something beautiful. Like Cinderella.
You won’t be able to expand off the beachhead
Owning a beachhead market is tough, but then you’ll be faced with expanding off of it in an environment where bigger, entrenched competitors are now paying attention.
Read The Innovator’s Dilemma if you haven’t already. It shows how investing in underserved markets can let you get ahead of bigger competitors who have to balance innovation with serving a large customer base.
The most important thing is not to say it will be easy. Explain what innovation you developed in your beachhead market that you can use to compete in bigger markets.
You lack expertise in this market
Ideally your founding team (and advisors) all have domain expertise in the market you’re targeting. Then again, many successful founders are innovative precisely because they aren’t burdened by knowledge of how things should be done.
Showing proof is a powerful counter argument to this type of pushback. Traction with key customers shows that you’re experts in the field now (even if you weren’t at the beginning). The bigger and more difficult customers the better. Testimonials deal with objections and endorse you and your product.
The Cheatsheet
As we go through various ways to tell disruptive stories keep in mind that one company can fall into more than one category. For example, your startup might create a new behavior and focus on a new market niche. Pick one approach as your main focus.
Links to the pitch decks: