Market Segmentation
In Inside the Tornado, Geoffrey Moore raises questions such as: Does your target client have a strong enough motive to buy your product, or will they choose a similar solution they are already content with? Offering the entire product rather than just a single section is one piece of advice. It is crucial to conduct a tactical evaluation of your competition and determine whether they would prevent you from establishing a commercial connection with your clients. How would you differentiate yourself from the alternatives that your customers see as options?
When undertaking primary research, one crucial step would be to map out potential related opportunities with only minor adjustments to your product and sales strategy. The focus would be on the end user and how your new venture dramatically improves their well-being. Please consider the actual value that the end user will gain, such as time savings, cost savings, or additional profit. These values are not the features of the product. Identify your lead customers, partners, and market characteristics. Bill Aulet uses a matrix when organizing this information on market segmentation, enabling more focus on a specific context.

Select a beachhead market and calculate the total addressable market (TAM)
Often, it is more advisable to avoid the largest market. It would be wise to focus appropriately as this is a significant learning experience. It would be wise to test market new products in lower-exposure countries and regions before reaching the worldwide market. This way, it would provide you with the ability to dominate a market in a relatively short period. It is important to calculate the TAM by asking several questions, such as how much they are spending today to accomplish what your product does? How much have they paid in the past for other new products? You should aim for a TAM between 15 million pounds per year to 100 million per year, which would be a good target to start with. Calculating the Compound Annual Growth Rate (CAGR), which is the growth rate of TAM, is also a good foundation to build upon at a later stage of development.

Target a specific demographic and build an end-user profile.
It would be an advantage if you include an end user within your team at the beginning to provide insights or hire a target end user for your executive team. Analyze the customers who showed the most interest in our potential offering and are willing and able to pay for it. You would need to
list the persona’s purchasing criteria in a prioritized order and ensure there is a detailed understanding of what key features they prioritize and what may be the factors that could influence their mindset. Once you discuss with your team, you could create more precise communication channels, and this persona can aid the alignment moving forward with the team, creating a consistent vision and guiding decision-making. You could list and interview 10 potential customers to verify the hypothesis you have built.

Product Specification and Value Proposition, and Outline Your Competitive Position.
Create a high-level product specification through a visual representation of what your product will be and share this with your customers. This could be a one-page press release about your product, which you could create although writing down features may create a more inwardly focused idea, and a brochure would be more suitable in this scenario. There has to be an element where your competitor cannot replicate what you are providing. This element would provide a certain level of protection as it would mean fewer duplicates on the market and less likelihood for someone else to create a similar product or service. Key areas to focus on would be customer service, low-cost player, and providing an outstanding user experience. Having a solid competitive position would also allow you to have a proper vehicle to communicate your qualitative value proposition to the target customer audience in a way that should resonate with them, keeping in mind how the customer is acquiring the product and the overall customer decision-making unit.

The Network Effect and Metcalfe’s Law
The importance of a network effect is critical, which follows Robert Metcalfe’s law. This is when the value of the network is related to the number of users in the network, which creates a positive feedback loop making the power of the network more valuable.

Business Model, Setting Your Pricing Framework
The creation of a business model will have a significant impact on your profitability. The lifetime value of an acquired customer (LTV) and the cost of customer acquisition (COCA). It is important to create value and then think outside the existing categories. The business models could include a one-time upfront charge plus maintenance, hourly rates, subscription or leasing model, consumables, advertising, microtransactions, etc., and you have the freedom here to experiment with different variations. It is equally important to map out your sales process and calculate the lifetime value of an acquired customer (LTV) and the cost of customer acquisition (COCA).
The last steps would be to identify and test out key assumptions. This would allow you to validate the primary market research by looking for customers to take specific actions; every individual assumption must be tested into more specific and narrow ideas.

These empirical tests can be carried out, which will increase confidence in producing a first-class product to sell to customers. Lastly, it is important to define the minimum viable business product (MVBP) and see whether customers will actually use and pay for the product, how engaged they are, and collect this data to understand the underlying trends and drivers and lastly produce a product
plan. The success in entrepreneurship is inherently tied to financial achievements. Identifying opportunities, strategically entering markets, understanding demographics, creating competitive advantages, and navigating financial models are key steps toward building a financially successful venture.