Bonus Material: Target Market Evaluation Canvas
A beachhead market is the segment of the entire marketplace that you want to conquer first with your internal startup idea. The term derives from the military concept of a beachhead – it’s a market that should be easy to capture, strategically valuable and give you a foothold from which you can advance and capture further markets.
Before you choose a beachhead market for your intrapreneurial venture, you’ll first want to consider all the potential markets for your concept. Think broadly and creatively, and segment the entire market into groups that share common characteristics. (If you’re new to market segmentation, The Market Segmentation Canvas can help you do that.)
Then, when you have your market segments defined, the next step is to perform a target market evaluation. In this exercise you will select your beachhead market by analysing your top 5-6 market opportunities against 5 key criteria. The rest of this article will explain exactly how to do that.
Part 1: Assess Each Market Segment against the Target Market Evaluation Criteria
(RELATED: [DOWNLOAD] Target Market Evaluation Canvas)
Choosing a good beachhead market is about finding a good fit across all the criteria that will have an impact your initial success. It’s not about finding the largest market, nor about finding the most lucrative.
Success will come from getting the right balance across these five ranking factors:
Ask yourself: Do you have a passion for this market segment?
You might be wondering how you quantify passion. Consider these three questions:
- Do you enjoy working with the people in this market segment?
- Can you see yourself working with them over a long period? Say 2-4 years? (If your venture is successful, you’ll likely be asked to lead the initiative for an extended period of time, to build on your initial successes)
- Would you still help/work with this segment, even if you had to do it for free?
This is all about your reputation in the market segment. When you consider this aspect, think about how potential customers view your firm, you personally and any other key people on your internal startup team. Ask yourself:
- Do you have credibility in this market?
- Do you or your team have existing connections in this marketplace that will make it easy to gain your first customers?
- Even better, do you have name recognition that will help you get past gatekeepers and start those initial conversations.
Next we need to consider who else is already operating in this market segment. Look at the solutions already out there that are solving the same problem as you. Then think about these questions:
- Do you have the financial capability to enter this market segment? Are people in this market easy to reach and influence? Consider any legal factors here – some sectors are heavily regulated and you make be restricted in what you can say or do, or you may need certain licences to trade in that market place.
- Could an entrenched competitor, a vested interest or gatekeeper block you?
- Can you be 2-3x better than the competition you’ve identified?
Are you good at working with the people and companies in this market segment? Do you get on with them and have rapport?
Do you or your team have existing market knowledge that you can make use of?
Do you or your team have existing experience of this market? Do you already understand the language, the goals and the values of the people in this segment?
Finally, the fifth factor to consider is the opportunity itself.
- Can this market pay the prices that you would like to charge?
- Is the market segment big enough to be a launch pad to other markets? In other words – is it big enough to enable you to get to break-even point?
- Is the market influential? That is, if this market adopts your solution are other markets likely to follow suit?
Part 2: Choose the Beachhead Market
Once you’ve assessed each of your candidate market segments against the target market evaluation criteria you’ll need to select your beachhead market.
A word of caution: make sure you balance all five factors when you make your final decision. For example, you may have a one candidate market segment that is a fantastic fit in terms of reputation, competition, competency and opportunity, but you just don’t have the passion for it. If you were to select this market as your beachhead your corporate startup would likely fail.
To put it another way, it’s better to choose a beachhead market where you score reasonably well across all five ranking factors rather than have three or four outstanding matches and one or two aspects very poor matches for your abilities.