It is suggested that up to 90% of startup failures can be traced back to the mismatch in perception of value between innovators and their market. “This mismatch is most startups’ Achilles heel,” says Anthony Nathan, co-founder and CEO of TMARA, which provides market adoption strategies for startups and new innovations.
While market adoption is important for most businesses, it is particularly critical in the innovation eco-space and is the key to most startups gaining traction.
Finding the perfect value match between your innovation and your target market, where the customer recognises the value of your innovation or product is the gateway to getting your market to embrace your disruptive innovation.
Why you should care about market adoption
A weak adoption rate will put undue pressure on the business to compensate for the weakness, says Nathan.
“By putting more pressure on all the other links – more sales people, more marketing, more market channels, more products, more features, more discounts, – this causes a cost-heavy (inefficient), inflexible and difficult to scale business.”
A strong adoption rate, on the other hand, Nathan says, doesn’t require compensation from the rest of the organisation, and it causes a lean, competitive business that can be scaled very easily.
What you have been doing wrong
Getting your startups’ market adoption strategy right can pave the way to your business’ success, however, the biggest obstacles standing in the way is primarily a lack of knowledge of the customer and what your product or service could do for them – the intrinsic value, says Nathan.
“Their target markets are not always very clear, and they tend to market ‘in general’ to everybody out there – it is difficult to find the perfect product-market fit, the product goes through many changes and they run out of cash before they can achieve a sufficient market adoption rate,” he says.
“Don’t sell the product, sell the new lifestyle, and the market will pull your product”
To ‘push’ or to ‘pull’?
Getting your market to actively desire your new innovation is the proverbial golden ticket. But how does one get their customers to “pull” their innovation rather than having to “push” it to them?
“By making the market aware that a new way or lifestyle is possible, feasible and desirable,” says Nathan. “They will then realise that your product makes it possible, which will result in the pull – don’t sell the product, sell the new lifestyle, and the market will pull your product. It takes a bit of time to sell the new way or lifestyle but it’s the only way to achieve effect market adoption!”
Pushing always creates resistance, Nathan says, and overcoming resistance costs a lot more time and money.
Questions to ask when planning and implementing your market adoption strategy
To plan and implement your strategy, Nathan says after deciding on the most appropriate target market, you must find answers to the following strategic questions:
1. Can your product or service, diminish a significant limitation for the market? – If YES, then you have some (1 out of 10) chance of success. If NO, then you have a very low chance of success, and should seriously reconsider proceeding with this venture.
2. How easy will the market be able to adopt the new rules, required to realise the full benefits, emanating from the removed limitation? If EASY, then you have a good (1 out of 2) chance of success.
3. Can you guarantee value to your client, in a way that is very convincing, while you will be able to keep the risk associated with the guarantee to an economically acceptable level? If YES, then you have a very high chance of success.
Anything between YES and NO, will require review, says Nathan, to determine if structural changes (PIVOT) could be possible, or not.