A market or market segment is, by definition, a group of customers who share the same pain and will refer to one another for buying decisions.
If we break that down, a market is made up of:
- A number of potential customers;
- People who share a pain, problem or opportunity;
- Channels for these people to connect, discuss and share purchase decisions.
A market can be an industry, a functional group across industries or an interest group around a problem or opportunity.
Founders often forget that markets are found and not created. They go beyond simple demographics (e.g., Men between the ages of 20 and 25 who like golf) and, are at their strongest when they are well-defined (e.g. Marketing departments for small retail chains with fewer than nine stores).
Your company can die winning a small or inexistant market. You need to know how big the pie is; how many people will want or need your product. There must be a sufficient number of customers in a market to sustain a growing business.
Run the calculations. Understand your total addressable market (TAM). Focus on talkative markets.Get Started Prioritizing Markets – Download my Market Prioritization Template Free
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