Sunday, 4 May 2014
The answer is in the method. The four best markets to find a job or start a new business. The highest barrier to success is to care so much for a product that you become blind about the market
Venture capital firms invest only in the most profitable segments of any market. If there are not plenty of customers who are thirsty for your product or service, you can forget about any kind of leveraged start-up.
The best four markets to find a job or start a new business
During the last thirty years, merchant bankers have drafted and polished to perfection the requirements for investing successfully in high-growth private companies. Lo and behold, those principles happen to be the same as the elements of tribal marketing. How come?
Like in any business riddle, the answer is already contained in the question: both venture capital firms and tribal entrepreneurs aim at a rapid multiplication of invested capital. What are the characteristics that identify the potential of a business to grow at a compound rate of 15% per year and beyond?
1. People who have an urgent need
It is not difficult to sell dental services to someone suffering from a horrible toothache. You are bound to do well if your new product or service addresses an urgent unsatisfied need, but there are not that many of those. Failing real pain, a strong emotional desire will do. Satisfying entrenched passions is the card played by tribal marketing, which is equivalent to the old venture capital dictum of seeking customers with maximum pain.
2. People who are in your target group and who can easily be reached
You won't hit targets that you can't see or reach in a relatively efficient way. Before investing in a private venture, merchant bankers check if the customers of that business are, to a good extent, a homogeneous group. Is your product or service aimed at a group that you can easily reach, such as trial lawyers, paediatricians, or school teachers? Starting your own parade is an expensive marketing method. The most successful tribal marketers find an ongoing demonstration, approach protesters, and sell them T-shirts favouring their cause.
3. People who are already speaking positively about you
The best markets are those where customers sell themselves. If your product or service delights ophthalmologists, they will tell their colleagues during their next conference. If you use such strategy, customers will find you on the web without your having to spend much on advertising. Investment bankers always search for this factor of "spontaneous marketing" when considering funding a new product or service. Tribal marketers often go beyond this level and they actually provide themselves an internet forum for customers to talk to each other.
4. People who have previously purchased any product or service from you
"How are you going to grow your company year after year?" is one of the toughest questions that a businessman must face when trying to obtain funding from a merchant bank. If your venture is destined to become a one-trick pony, your growth prospects will be too limited to justify a substantial commitment from professional investors. Tribal marketers use the clever approach of searching for items that can please their existing customers, instead of developing random new products which would require massive marketing efforts.
In essence, the answer is in the method. It is a matter of throwing away what doesn't work and focusing on the little cream that floats on skim milk. The highest barrier to success in venture capital investment is caring too much for a product, to the point of becoming blind about the market.
The most difficult aspect of tribal marketing is forgetting about what you want and making the effort to understand other people. Mental flexibility is as profitable as it is demanding. Alternatives might look sweet and comfortable in the short-term, but ultimately, death ensues through marketing asphyxia.
For more information about rational living and personal development, I refer you to my book The 10 Principles of Rational Living
[Image by dicktay2000 under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]