Have you ever been in the lead on a hike through deep snow? It sucks to be up front. You’re the one breaking through all of that fresh snow, stomping it down to make a path for those behind you. It’s exhausting, and if you don’t share those responsibilities with others in your group, it’s quite possible you collapse in exhaustion before you reach your destination.
Trying to break into a new market can be a lot like that. You can see your target market on the horizon. You know the market is there. But getting there is going to be a slog. And it’s quite possible you’ll run out cash and investor interest before you ever get there to prove that you were right.
I meet with entrepreneurs all of the time that have identified a market need, and have developed what they believe to be a compelling solution to fit that need.
But there are no clear pathways to the customer. They don’t exist yet.
In the B2B world, this can mean there are no paths through the procurement process. No one knows how to buy what you’re selling. It’s so different, nobody is sure which budget it would hit. Or the approach is 180 degrees from what they are used to, so they don’t even have a decision process to evaluate your solution.
In the B2C world, it can be as simple as trying to get early adopters to simply try your product so that they can see the impact it would have.
This can be an incredibly frustrating situation to find yourself in. You can see your market. You know your solution is the perfect fit. There is financial opportunity, your next fundraise, and higher valuations just over that next hill.
But here’s the problem. None of that matters if you can’t find that path before your cash runs out.
There is a long list of examples of the companies that were first to a new market, and it’s the second or third player that reaps the rewards. The first company breaks down the snow, creates the path, and collapses in exhaustion as companies pass on by to take advantage of all of that groundbreaking work.
You need to recognize when you’re in this situation before it’s too late. It doesn’t mean you have to give up on your target market. But you need to figure out survival strategies to keep your company moving forward while you develop this new market.
In an early stage company, you’re in a race to prove to investors that your team can find product-market fit before you get to the next round. When you find that your desired market might be just out of reach, you might be able to find shorter term wins that move the company forward as you continue to prepare the ground for the bigger opportunity.
The only thing you can’t do is continue to plow through the deep snow as you get more and more exhausted. As your cash continues to dwindle away, and your investors become less and less interested with your lack of progress.
If you let that happen, you’ll just be another company collapsed in the deep snow as your competitors pass you by.