Maximize Product Potential
After you create a strong USP (unique selling proposition) and UVP (unique value proposition), you can assess the market potential of your product or service. Will you be filling an important unmet need in a multibillion dollar industry or simply babysitting for friends in your neighborhood?
Both of these examples are perfectly valid markets. However, creating the next iPad will create a much larger market than babysitting for your neighbors.
Answer the following important questions:
Do you fill a compelling unserved or underserved market? You can create a strong value proposition for a market that’s too small, too crowded, or too risky. The new Newton by Apple was a sophisticated product with a strong selling proposition and value proposition — on paper, that is. Despite all the signs of success, the Newton wasn’t a commercial success.
What Apple deemed to be an unserved market was in fact a market that wasn’t ready to be served. Another example is a much-needed product for an extremely small niche. Dozens of products would probably fill the needs of sword fishing enthusiasts, but the market is very small.
How valuable is this USP? Being the only whitening toothpaste is much more valuable than being the most experienced plumber in a town of 1,000 people. Balance a strong and focused USP with a market worth chasing. When Apple succeeded in creating a market for tablet computers, the market was worth billions.
Do you have a blue ocean strategy? W. Chan Kim and Renée Mauborgne developed the concept of the Blue Ocean Strategy (see the article on the Harvard Business Review website), in which they suggest that powerful new markets can be created by challenging the existing paradigm of competing better in existing markets, which they call red water.
They suggest that these overfished, bloody waters are no place to build a long-lasting business. Instead, the authors suggest finding deep blue water to fish by challenging conventional wisdom. After you find the blue water, you can fish prosperously for a long time.