The product, service or technology that serves as the foundation of your new business enterprise must be more than a good idea or cool science project.  It must solve a critical problem or respond to a compelling market opportunity.  Indeed, lenders, investors and potential employees will want to understand the size and scope of this opportunity.  And, so must you.

When it comes to assessing your market opportunity, your opinion might be interesting but it is no substitute for documenting in a serious and professional manner the market landscape in your space.  In fact, many experienced entrepreneurs will tell you that during their initial assessment of the market opportunity, they determined that they were focusing on the wrong market.

So, what is the best course of action that will enable you to document your market opportunity?

Step one is to simply list the questions that must be answered as you validate the opportunity.  For example, questions that you might want answers to include:

•    What customer needs will your product, service or technology address?
•    Who is the customer (profile) that will benefit?
•    What is the size of the customer base?
•    Who are some potential customers by name?
•    How does the customer currently meet the needs to be addressed?
•    Have customers said that they will purchase your product, service or innovation?
•    How much can you sell annually?
•    How much will customers pay for it?

So, now that you know the questions, it is time to get the answers.  This is the tough part of the job.  The answers should be quantitative and verifiable whenever possible.  Keep track of your sources.  Here are some useful ways of researching your market opportunity.

Web Search – Using your favorite search engine and appropriate search words or phrases, begin a careful search of everything you can find on the internet that pertains to your product, service or technology; your intended target market; your presumed competition and your prospective customers.  Sophisticated research reports, studies and analysis may be purchased online from firms such as Frost & Sullivan and Forrester Research.

Public Company Documents – If you haven’t done this already, you want to review websites and public financial information of possible competitors and customers.  In one place you might find that a competitor brags that it has captured 17% of the market and in another place you might find that it will book revenue of $15 million in the current year.  Some simple arithmetic will tell you one competitor’s assessment of the total size of the market.

Industry Meetings & Trade Shows – People love to talk about themselves and their companies.  By attending targeted industry gatherings, you will be amazed at how much you can learn.  Remember to document who you speak with and what they say.

Interview Potential Customers and Partners – This is often the most time consuming and most difficult to accomplish but it is always going to be your most effective form of market research.  Talk to customers and find out if they will buy what you hope to sell.  If so, how much will they buy and what are they willing to pay?  We know how hard this is but we also know how important this information is to your success.

Successful entrepreneurs really understand their markets.  This knowledge will allow you to execute with focus and precision.  But don’t worry.  If you don’t want to make the market research investment upfront, the market will teach you everything you need to know.  The only problem is that by then, it will be too late.

The six companies will have five minutes to pitch their ideas to a panel of judges at Launch Pad, which will be held live on-stage at Sky City Auckland at 12.30pm on March 13.

The winning pitch will receive $70,000 worth of IT, marketing, legal and accounting services, as well as three 5102 Hewlett Packard Netbooks and 12 months’ account management support from four of the competition’s sponsors, WorldxChange, Republik, Hudson Gavin Martin and MYOB.

The second and third place-getters will receive prizes of $10,000 and $5000 sponsored by the Ministry of Economic Development and a HP 5102 Netbook.

The judges had this to say about the shortlisted candidates:

Dazzle Tickets, a new ticketing solution which will make it possible to manage event ticketing from start to finish, “Sometimes the simplest ideas are really the best” Simon Martin, Partner Hudson Gavin Martin.

Fun2bFit which is aimed at reducing childhood obesity. “A Bold and Unique Concept” Julian Smith, General Manager MYOB.

Speech School TV, a subscription-based internet television channel “could have huge potential if this model takes off globally” Paul Clarkin, CTO WorldxChange.

Big Little Bang, which recognizes the synergy between online gaming and social play  “Huge new territory fantastic to see a kiwi business step up like this” Craig Abbott, Director Republik.

Livelink, which makes it easy for people to “pick and send” branded, multi-media e-marketing, “Has the potential to be as important to email as the stamp was to the postal service” Rob Spray CEO Telecommunications Industry Group.

Lifetime Health Diary, which provides a single and complete lifetime health and medical record “Timely solution to a massive issue of multiple health records” Rob Spray CEO Telecommunications Industry Group.

A Nelson schoolboy has also been awarded a special prize of one year’s free broadband for his entry, a proposal to expand his business, Acronum Industries, which sells electronic components online. The judges commended him for the strength of his business model, his detailed financial statements, and his general business acumen.

“At 15 he is already running his own business, and it’s working.” Paul Clarkin CTO WorldxChange.

Launch Pad is being held as part of Planet 2010, a two-day conference taking place in Auckland on March 12 and 13 to showcase the future and value of communications technology to New Zealand. The keynote speaker at the conference is former American astronaut Buzz Aldrin.

Planet 2010 is being organised by the Telecommunications Industry Group. TIG Chief Executive Officer Rob Spray says his organisation is committed to helping innovative New Zealanders achieve their goals.

“We see Launch Pad as a way for us to find and champion New Zealand’s best start-up companies, and help them grow their ideas into something spectacular.”

For more information contact Rob Spray (m) +64 21 648 715, (t) +64 9 475 0207, robspray@tig.org.nz

ABOUT PLANET 2010

The Telecommunications Industry Group has created the Planet 2010 communications and technology conference to showcase, over two days, the latest innovations in communications technology from some of New Zealand’s smartest companies.

Planet 2010 is not so much about high-tech hardware (although there’ll be plenty of that). It’s the chance for everyone to discover the smarts and capabilities of a wide range of companies. And marvel at what they can do for business.

Day One will feature technology showcases, specific presentations and breakout sessions catering to a business audience. Day Two will cater to a general audience and feature interactive exhibitions and a showcase of the hottest end user products and innovations.

All this, plus our very special keynote speaker, Buzz Aldrin, adds up to Planet 2010 being an experience that’s not to be missed. Planet2010. 12 -13 March, 2010. SKYCITY Convention Centre, Auckland.  www.planet2010.co.nz

Kiwis are notoriously bad at reaping the reward from our innovations. The reasons include:

• The inventor likes inventing, and has no or little interest in business, so the invention stagnates, never to see the light of day, or market.
• The inventor falls into the kiwi #8 wire trap believing they should do almost everything themselves, including building a business – when they are not the best people to do it. Inventors and technical specialists tend to be product driven rather than market focused, and this has been the source of failure for many promising innovations.
• Inventors often undervalue their inventions as they seem so obvious to them, and do nothing with them.

It’s time to turn the tables, and make sure that everyone benefits as much as they can from kiwi ingenuity – inventors, entrepreneurs, investors, customers, and the economy. To do this Upstart is facilitating matching inventions with an appropriate business driver right from the start. That’s what the “Upstart Den” is all about. It’s an opportunity for inventors to present their inventions in a safe environment to potential entrepreneurial partners or licensees who have the character and talent to drive the invention to commercialisation so everyone benefits.

We already have of a number of inventions and entrepreneurs, but there’s room for more.., so take action NOW and make sure you’re in the right place at the right time to benefit from your talents and skills…! Even if you aren’t sure what the commercial potential of your innovation or invention is, or don’t know what business to start if you’re an entrepreneur, don’t worry. We’ll work through that with you when you contact us.

Where: Upstart, Level 1, 333 Princes Street, Dunedin
When: Thursday 4th March, 2010, 7pm
Applications: close 18th Feb 2010, email info@upstart.org.nz or phone Lisa on 467 7013

As part of the scope of the project a “matchmaking” component will facilitate the bringing together of entrepreneurs, technologies and business concepts, specialist skills and expertise, resources and investment to enable start up businesses to be established and to facilitate bootstrapping.

As an example, a person may come up with a great idea for a business that requires technical development, but they don’t have the money to invest to make that happen. Through this project they can be introduced to an IT developer who is happy to work for a share of the business (sweat equity), and a mentor who is willing to donate their time and expertise to point them in the right direction. A local print company may recognise that by providing some business cards now for free, they are likely to win a long term loyal customer as the business grows and thrives – and it is a very low cost of acquisition for them.

If you feel you have something to contribute to starting a business, or would like to be involved in this project we invite you to communicate your interest by email to info@upstart.org.nz.