Roland Dürre
Saturday September 13th, 2014

Start Up (8) – Learning About the Market!

If you start in a market you do not know anything about, you must have really strong reasons. Especially if you selected a market where many contestants have already established their positions or if the market is generally perceived as basically dead.
Unfortunately, this is exactly what many founders do. Sometimes the reason is probably their inexperience and because they do not know how complex such a market is. Perhaps they also do it because they want to emulate famous idols, like Steve Jobs. He shattered the market of classic mobile phones with his i-phone.

At the time, the “other Steve” (Mr. Ballmer of Microsoft) provocatively said something cynical that did not at all sound so very unreasonable to me: “What does Apple want with a device on the cell-phone market that does not even have keys and with which you cannot even call someone?”. Well, Steve Jobs simply ignored this and was proved correct.

I think this is not the common business rule. In fact, it is a rather special case. Consequently, if you are a “normal founder”, you should take a really close look at the market. It is just too daring to start on a market you, as a young university graduate, cannot really know. You should at least know it a little bit.

This means you have to learn and work towards understanding your target market. Regardless of all enthusiasm and euphoria, you usually cannot be a success unless you learned the market in your target segment and understand its workings. There is no other way of being able to judge if your own idea actually has a chance of survival. More often than not, it is still rather unfinished and, like a rock in the river as it makes its way down the stream, receives its final polish before it will become one or several nice round pebbles.

The best solution when it comes to “learning about the market” is trying it yourself! But this will cost time and energy. There can be setbacks and disappointments, all of which you will have to be able to tolerate.

Learning, too, is expensive and costs energy! You can often learn more comfortably “sponsored by others”, for instance as an employee. And unfortunately, the proverb about “learning years not being master years” is also true when you found a company and learn a market.

Consequently, my recommendation to founders of a start-up enterprise might be
“Spend some time as employees in your target area. And when the moment comes and you feel you have learned enough, get under way!”

In retrospective, I must say that I, too, did exactly this. I learned all the technology and competence about projects at Siemens – and I learned how to do business at Softlab.

RMD
(Translated by EG)

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