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The ‘10 Ways that can help in Evaluating a Market’?
A checklist that helps to identify the overall attractiveness of a new market is the 10 Ways to Evaluate a Market: urgency, market size, pricing potential, consumer acquisition costs, value distribution costs, offer uniqueness, market speed, up-front investment, up-selling potential, and evergreen potential.
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Josh Kaufman Explains The ‘10 Ways to Evaluate a Market’
Before you run, it pays to do some homework if you're thinking of starting a new company or growing an established business into a new market.
A back-of-the-napkin approach you can use to identify the attractiveness of any future market is presented by the 10 Ways to Evaluate a Market. On a scale of 0 to 10, measure each of the 10 factors below where zero is extremely unattractive and 10 is extremely attractiveness. Be conservative in your estimation when in doubt:
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Josh Kaufman Explains The ‘10 Ways to Evaluate a Market’
- Urgency: How badly do people want this right now or do they need it? (Renting an old movie is typically low urgency; seeing a new picture on opening night is high urgency since it only happens once.)
- Market Size: How many individuals are actively buying stuff like this? (The market for underwater basket weaving courses is very small; the market for cancer cures is massive.)
- Pricing Potential: What is the highest average cost that a customer will be prepared to pay on a solution? (Lollipops sell for $0.05; carriers of aircraft sell for billions.)
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