As a startup founder, there are a few key questions you should be asking before you get too far into building your venture that will help you evaluate whether it's worth the investment of your time and resources. Things like: how big of an opportunity is this? Who else is trying to address this opportunity? How will our startup be different from the competition? Learn about how to get the answers to these, and other critical questions that will help you assess the opportunity.
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3 Steps to Follow
1. Know your initial customer and
value proposition
2. Develop your understanding of
the market
3. Invest strategically
8
Focus
Differentiation
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Step 1:
Know your initial customer and
value proposition
What problem do you solve? (Unmet needs)
Who needs/wants your solution the most? (Underserved customers)
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TOTAL
Initial Target Customer
Segment
Criteria
List ≧3 potential customer segments you believe are most likely to be your early adopters/enthusiasts
Across the top row. List ≧5 criteria (excluding market size) you believe will determine your success in the left
column. Honestly rate how you can serve each segment today on a scale of 1 to 3, where 3 is best. The segment
with the highest total score goes into the Customer Segments box on your Business Model Canvas.
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Step 2:
Develop your understanding
of the market
Who else solves this problem and how? (Competitors and substitutes)
What are their business models? (Competitors’ Business Model Canvas)
How much are customers spending to solve the problem? (Market size)
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Search for a solution
Market immersion
Ecosystem
Industry terms
Recent news/issues
How would you find a solution to this problem?
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Search volume and terms
Awareness/intent
Related terms
Competitiveness
Mobile searches
How many people are looking for solutions? What words would your customers use?
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Petal DiagramWhat are the top 5 adjacent markets of competitors, substitutes, or complements
where your target customers are looking, using, and buying solutions to their
problem? How are these alternatives suboptimal relative to your solution?
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Top Down Market Size
$10 gazillion
market
Everybody eats! The global food market is massive!
Even if we take .0001% of this market…
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Food delivery SAM
How much is spent on food delivery thru iPhones
right now?
$800m/yr serviceable available market
$20bn Opportunity
x 80% smartphone
penetration
X 10% ordering lunch on
phone
x 50% on iPhone
$800m
200M Americans between 18-65
~10 days/year on lunch delivery
$10 average lunch spend
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Total Available Market
Every potential customer
x
Avg # of purchases made annually
x
Avg price of each purchase
TAM tells us how big the pie is
How many potential customers exist and how much would they spend?
How much is currently spent trying to solve the problem each year?
What’s the big vision?
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Serviceable Available Market
SAM tells us how big your slice of the market is
Who would buy your solution now, given your existing business model?
Who will want a half-baked product from a small team with no money?
What are you focused on right now to set you up for TAM?
Serviceable customers
x
Avg # of purchase made
annually
x
Avg price of each purchase
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Step 3:
Invest strategically
Why aren’t competitors solving the problem well enough? (TAMS)
How are you (or can you become) meaningfully different? (2x2/Positioning)
Why can’t they solve it this way too? (Competitive advantage)
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Petal Diagram
How are alternatives suboptimal relative to your solution?
What makes you a meaningfully different/better solution?
Time
Access
Money
Skill
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Positioning statement
For (target customer) who (has this need)
we are a (category) that (has these key benefits)
unlike (competitors), we (have these differentiators)
BMC BMC
Petal BMC/Petal
Petal Petal/2x2
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“Even though you
target just those few
potential customers
today there is no law
that says you are
limited to those
customers for
eternity.”
- Darmesh Shah, Hubspot
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3 Enter the $300k NYU
Entrepreneurs Challenge
Training & coaching for your startup!
Deadline to Enter is Oct 6th!
bit.ly/NYU300k
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4 Come to the Healthcare
Makerthon Pitch Night
Learn about most pressing
challenges in healthcare and how you
can help build the solutions on Oct
6th!
bit.ly/pitchnight16