One of the most critical decisions that early-stage technology entrepreneurs must make is to determine the maturity of the marketplace they plan to enter. The reason this decision is so important is that both product and marketing strategies must change as a market matures. In this context, maturity refers to whether direct competitors are already active in the market.
A truly innovative product will solve a customer problem that has not been solved before, often because the technology to do so did not exist or was inadequate for broad market adoption.
The market is new when such an innovative product is launched, and so:
In a new market, customers are not immediately ready to buy. A technology startup must be prepared to create the market by:
Both processes take time.
A product that enters an existing market faces a different set of challenges, namely those posed by having competitors that
In an existing market the product and marketing strategies differ than when the market is new. The product category exists, and this also means that the media are aware of its existence.
The presence of competition means that several potential customers are already aware of your competitors’ products and may already be using them.
As a new entrant in such a market, you must either
Assessing the maturity of your market is a complex task. Prominent authors Geoffrey Moore and Steven G. Blank have created analytical frameworks with the purpose of simplifying the process, as has IT advisory firm, Gartner Inc. Each framework is described below, along with links to articles that provide further details.
The TALC is a tool created by Moore to help technology marketers understand the marketplace in which they operate. Moore first described the TALC in his book, Crossing the Chasm (1991), and it has become a well-known concept across most technology-driven markets. The main criticism of the TALC is that it is complex to apply in practical situations; however, in its defence, it must be acknowledged that the complexity usually reflects the reality of the marketplace, something marketers should not ignore.
The assessment of market type is a framework described by Blank in his book, The Four Steps to the Epiphany (2005). Compared with the TALC, the determination of market type is a somewhat simpler process, and to a certain extent, Blank has incorporated some of the key points from Moore’s framework. A possible weakness of the tool is that it is a somewhat crude approach, but for early-stage entrepreneurs this often proves more helpful than something complex.
Developed by IT research firm Gartner, the hype cycle is a tool for assessing the maturity of a technology or application. The hype cycle is primarily an instrument for buyers and users of technology and less so for marketers. The tool’s strength lies in that it is based on years of experience and is regularly updated by Gartner analysts on a wealth of technology categories in the IT space. Conceivably, the hype cycle could be applied to other technologies, but as it is a proprietary tool, there are limits to its application.
The exact implications of the market maturity for your startup depends on how disruptive your offering is and the nature of market, both of which you need to assess before making further marketing decisions.