Defining Your Target Market

Clearly defining your target market is a very important step in any startup’s initial days. Not having a defined target market leads to a loss of money and resources.

There are 3 steps in defining your target market.

Step 1: Start out with identifying the use cases for your startup.

Step 2: Once you have the use cases, define the users who would most likely use the product/service offered. Try to be as detailed as possible in defining users by stating demographics like age, sex, income levels, status etc. , whichever are relevant.

Step 3: Lastly define the location you intend to target in different phases of your growth.

Once you have the target market defined, it becomes easier to come up with a marketing plan which can be focused and targeted so as to get the best return on the marketing spend.

The Stealth Startup

A stealth startup is one which tries to avoid any public attention. So why would a startup try to avoid any attention because as we know, the more attention a business gets, the more potential customers.

The reasons for a startup operating in stealth mode can be the following.

Protecting the Idea – We all know that ideas, once in the public domain, get copied. Filing a patent is a lengthy and expensive proposition. Hence some entrepreneurs prefer to run their startup in the stealth mode upto a point where they are able to gain sufficient traction and headway over others who might look to copy the idea.

Product – Entrepreneurs running in stealth mode also look to keep fine-tuning their product before it goes into the public domain. Generally the product is tested with a small group of people who generally are asked to sign an NDA.

With these advantages comes some disadvantages of running in stealth mode.

Attracting Stakeholders – Without publicity, the stealth startup may find it difficult to attract stakeholders like employees and investors. The startup’s public image plays an important role in getting these stakeholders onboard.

Testing – Since the startup prefers to limit usage to only a handful of users, there may be a risk of getting results based on data which is inadequate and biased.

BloomReach is a startup which serves as a good example. They started out in stealth mode as they were trying to offer SEO as a service, a service which requires a lot of investment in the product and which could be copied quite easily. The team realised that good execution is more important than being out there early on itself. When the startup launched publicly, it was a great success.

Marketing Hack – Fake It Till You Make It

Any startup, especially an online one, can use this hack to build trust and credibility. You can try to look bigger than you actually are. If you act like a big deal, customers will treat you as a big deal.

We did this in Beveragewala as well. We were actually a very small startup doing around 10-15 orders a day when thought about doing this. Some of the things we did were as follows.

Professional Packaging – We started using good quality branded packaging to dispatch the goods. This made the look of the packages very professional and coming from a ‘big’ player.

Customer Care – We bought a toll free number which started with the 1800 series rather than having a regular mobile phone as our customer support helpline. Also a professional recording giving users various options to navigate through gave the entire experience a very professional and big player touch. Along with this, we also created multiple email ids, one each for every possible query.

Stationery – All our printed material like flyers, invoices etc. had our branding on it and were well designed and printed on reasonably good quality paper.

Website Interface – We added a lot of sections to our homepage to make the site look very busy. Also the banners and photographs were changed frequently.

Making your startup look as big as some of your competitors can be done with little investment. However, this tends to make an impact which is quite strong in the minds of your customers.

Big City Startup vs. Small City Startup

Starting up in a big city differs a lot from starting up in a small city. No matter what business model, there are certain fixed differences when you start a company in either case.

Costs – Big cities tend to have higher costs of living and an entrepreneur will find it more difficult to sustain himself/herself.

Availability of Talent – A startup is as good as it’s team. Finding the right talent is crucial for any startup. Bigger cities tend to have a higher number of better and specialized colleges (though this cannot be generalized) and hence the availability of a good talent pool is higher. Also talent from bigger cities generally avoids settling in smaller cities due to the loss in lifestyle.

Regulation/Support – Bigger cities tend to be some years ahead in development as compared to smaller cities. The regulatory and support systems in bigger cities tends to be stronger for new entrepreneurs.

Market Size– Bigger cities have a bigger population, which implies a bigger target market for the startup.

Competition Levels – Startups in bigger cities tend to have more competition as compared to startups in smaller cities (this can partly be attributed to the bigger market size).

Learn During Lean Periods

A Lean period can be defined as one where there are reduced work opportunities for a business. This may be due to weak market conditions, some policy issue or general sentiment of customers. What should an entrepreneur do during such a period? Learn.

Look Internally: See if you business is running efficiently and can be improved upon. Since you have a lot of time at hand, use this time to improve systems, processes and efficiency in your operations.

Read: Read up on the latest developments in your Industry and know what’s happening all over the world. Try to identify any opportunities to maneuver your business.

Plan: Plan for when the conditions and sentiment becomes optimistic again. Have a solid plan based on your previous experiences. Start building up resources and systems to be able to capitalize on the better periods ahead.