Entrepreneurship to solve real problems
Within the series of tips that since Intelectium we are offering entrepreneurs through explanatory videos with Patrick Hunt, CEO of Intelectium, we stress the importance of engaging in relevant problems, and not creating novel solutions for activities that don't really have a market. This is something that we have mentioned in previous episodes of this series as one of the most common mistakes in entrepreneurship today.
Market segmentation and search for problems to be solved
In general, entrepreneurs segment the markets in which they launch products according to two types of characteristics: Product features (category, price, etc.) or the characteristics of consumers (age, sex, marital status, etc.) .However, this way of segmenting the market is too static for the current times. Things change rapidly, and the tastes or needs of customers change more rapidly than their demographics, psychodemographics, or even attitudes. For this reason, segmenting the market according to its profile is very imprecise. Consumer purchasing decisions are not confined to those of the average consumer in their demographics, just as a consumer's search for solutions is not limited to those of other products within their category. When a person has to do something, they look for products or services that help them do that something. Entrepreneurs need to be able to fully understand that “something” that consumers want to do in order to be able to develop products or services with the right functionalities to meet real needs.The only products that certain markets find are those that help consumers carry out an activity that they are trying to do. The product or service launched by an entrepreneur must solve what we call a “relevant problem”, an activity that exists, which is significant. When entrepreneurs segment their markets based on the “work” that their product or service helps to solve, they are generally faced with four aspects: - The market is much bigger than they thought- Their market share is smaller than they presumed- Your real competitors aren't necessarily among the other products in your category, it expands the scope of competition- The growth potential is greater, because “non-consumption” is usually one of the biggest competitorsProducts developed in this way are known as “purpose brands”. The great advantage of purpose brands is that they are not built through large investments in advertising and marketing. Two very expensive types of investment that a start-up company cannot rely on to grow. All of these concepts are extremely important for entrepreneurs and have been developed in depth by academic Clayton Christensen from Harvard University and by Toni Ulwick, an American consultant specializing in issues related to innovation. We recommend consulting the publications of both because they approach and clarify many concepts surrounding entrepreneurship and innovation. Among Clayton Christensen's bibliography we find titles such as “The Dilemma of Innovators” (1997) and The DNA of the Innovator (2011). As far as Toni Ulwick's bibliography is concerned, the book “Give Your Customers What They Want” (2006) stands out.
