Know What Inning You’re In

As an entrepreneur, we think that the market needs our solution now and can’t understand why it is taking so long to get investors, win customers or attract employees. While this perspective can be exciting, it can also create misalignment of people, financial resources and expectations.

“While this perspective can be exciting, it can also create misalignment of people, financial resources and expectations.” 

Importance of Knowing the Market

Have you ever looked down the strip in Las Vegas and seen your hotel and decided it was not too far to walk? The backdrop of the strip creates an optical illusion. As you walk, you realize how far away it is. Had you known, you would have prepared differently.

When an idea or product is unique, it is new to the market. This may be what makes it sell, but it is also what makes the market slow to comprehend and adopt your innovation. So, one of the perspectives we must develop is the ability to clearly judge how ready the market is for your solution. In baseball terms, we have to know what inning we are in. Understanding what inning you are in is critical to:

• establishing the right pace for your company
• setting expectations for your team and other constituents
• aligning capital and other resources.

For example, knowing how long it will take for the market to accept your idea is critical to aligning the early employees of the company. Communicating that you are six months away from revenue in a market that really requires eighteen months sets bad expectations for your team, vendors, and especially, investors. Six months in, there will be disappointment from all sides.

This is also important when it comes to investment capital. The amount of capital you need for market viability, and the point in time that you raise it, are largely based on what inning you are in.

How Do You Evaluate the Market

There are many factors that go into this determination: the nature of the industry, established players, competitive solutions, pricing models, market influences, nature of the disruption, and the list goes on. How do you understand when the market is ready for your product or service. Try asking the following people:

• Ask Someone with No Horse in the Race. Find someone who doesn’t have interest in you or your company and ask them about your product or service. You are more likely to get an unbiased opinion, especially if they know nothing about your market and don’t have a vested interest in you succeeding or failing.
• Ask Your Investors. Investors have seen a lot and may have a more sophisticated or nuanced frame of reference against which to measure your offering. For example, they may be able to compare other companies they have invested in and how long it took to get to market.
• Ask Other Entrepreneurs. It might be an entrepreneur you know, or one whose work you respect. You will likely get a candid assessment from other entrepreneurs that don’t have the emotional attachment that you do.
• Ask Industry Experts. While it is beneficial to get views from unbiased and uninvolved people, they often lack the knowledge of your specific industry. People in your industry understand the normal selling process and when and how products are brought to market.

In addition to gathering this feedback, you must understand the impact that your financial resources can have on timing. While new solutions always take time to come to market, this can be accelerated if you have significant financial resources. Blockbuster aggressively went across America and bought out all the video rental stores. If they had not had the capital to do so, it would have taken many more years for that industry to evolve.

In any event, be conservative. Take the opinion of your most skeptical employee, advisor or investor. It is better to set the expectation that your film will take two years to complete and deliver it early, than to suggest it will be finished in eighteen months and have it take a full two years. This effort will help you set appropriate expectations for vendors, investors, your team, and you. It will also strengthen their trust and support of both you and your business.