(2019-05-07) Steve Blank How To Stop Playing Target Market Roulette A New Addition To The Lean Toolset

Steve Blank: How to Stop Playing “Target Market Roulette”: A new addition to the Lean Startup toolset. Lean Methodology consists of three tools designed for entrepreneurs building new ventures:

• The Business Model Canvas – to write down all the hypotheses about a new business;
• Customer Development – a process for testing those hypotheses outside the building;
• Agile Engineering – to rapidly build minimal viable products to test product/market fit.

These tools tell you how to rapidly find product/market fit inside a market, and how to pivot when your hypotheses are incorrect. However, they don’t help you figure out where to start the search for your new business

A new tool – the Market Opportunity Navigator – helps do just that

the Market Opportunity Navigator has closed the gap between academic theory and books by offering a simple, visual way to navigate the process of how to select what market to start with. Developed by Prof. Marc Gruber and Dr. Sharon Tal and based on hundreds of cases they studied during their practical and academic work, the Market Opportunity Navigator is described in their new book, Where to Play.

In three simple steps the Market Opportunity Navigator can help you:
Identify a portfolio of market opportunities stemming from your technology or unique abilities
Reveal the most attractive domain(s) by evaluating the potential and challenges of each option
Prioritize market opportunities smartly to set the boundaries for your lean experimentations

Different Playgrounds mean different Rules of the Game

Could there be greener pastures (larger markets, more profitable markets, etc.) out there for commercializing your technology or unique abilities?

Taking the time to reveal the most promising market – the best starting position – before you engage in a focused customer development process is critical

experienced entrepreneurs tend to generate a portfolio of market opportunities before deciding where to play

Identifying your Arena and Choosing Where to Play

Putting it all together: A Superset of Tools

the big-picture view provided by the Navigator helps you zoom-out to understand “where to play,” while the detailed views of the lean approach and the Business Model and Value Proposition Canvases help you zoom-in and understand in detail “how to play.”

Having a market opportunity portfolio to draw from offers an additional benefit. By having gamed out multiple markets, you can bake agility into the DNA of your venture – a key component in the Lean methodology.

Let’s take a look at an example

We Can Fly Anywhere – but Where Do We Go First?

Flyability develops drones to inspect difficult-to-access locations

completely different markets: industrial inspection, search and rescue, entertainment or surveillance – to name but a few. Each of these markets varies significantly in its business context and in its promise for growth.

Worksheet 1: Generate your market opportunity set

Worksheet 2: Evaluate market opportunity attractiveness

Overall, five market domains seemed interesting and required further evaluation.

potential of each market and its unique challenges

it became clear that thermal power plants were a “gold mine” option worth playing in.

Worksheet 3: Design your agile focus strategy

designed a small portfolio of backup and growth options that they would keep open. This foresight laid the ground to early key decisions that have long-term consequences, like how they developed their drone or chose their brand name.

not only figured out “Where to Play” it has mapped out an interesting growth path that is appealing to investors

Insights for VCs, Tech Transfer Officers, and Social Entrepreneurs