Ten metrics to judge a market
When performing market research, we can focus on ten specific aspects that would allow us to judge whether we should jump in or not:
- Urgency: are people craving for your solution? Or better said, how badly do they want their problem to be removed?
- Market size: The one everyone focuses on. Market reports can be an indicator, but are they actionable? Bottom up market sizing seems much more valuable, especially for scipreneurs
- Pricing Potential: How much can your charge for your solution? May be hard to know without talking to people on certain terms.
- Cost of customer acquisition: This is one most non-digital entrepreneurs overlook. Especially for deep tech companies, this cost may be a deal breaker.
- Cost of value delivery: This includes the cost of building the solution and delivering it to the customer. Even with a marginal cost approaching 0 (digital goods), there may be service costs, for example.
- Uniqueness of offer: how different is what you do from what others do? Building a Categories of competitors.
- Speed to market: How long is it going to take to have a solution that you can sell?
- Up-font investment
- Upsell potential: What other things can you sell to the same customers? Associated products and services you can offer to people
- Evergreen potential: How much work you have to do to keep selling? A service requires continuous selling. A book can be sold many times after writing, but a customer will not purchase the same book twice.
You can assign a value from 1 to 10 to each point. If the sum is $<50$, then it's not worth the effort. If it's $50<x<75$ , then there's potential but it'll require quite a lot of effort. If it's $>75$, then the opportunity should be seized.
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Aquiles Carattino
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