Don’t Make These Mistakes When Entering a New Market
There is a lot of hair in India. That was the blinding insight that started our quest to develop a disruptive business in India’s men’s grooming market. Our idea was to port the efficient, affordable QB House model that is popular in Singapore and other Asian markets to India (QB House is detailed in the section titled “Remember: Quality is Relative” of The Little Black Book of Innovation). We would launch a series of single-chair kiosks that offered high-quality hair cutting, shaving, and related grooming services at affordable prices. We saw a wide open market, what is sometimes called a white space, blue ocean, or greenfield market.
Whatever your color of choice, pioneering new markets feels exciting. Who wouldn’t want to do what hasn’t been done before? Think of all the rewards awaiting innovators that follow in the footsteps of organizations like Google and Cirque de Soleil.
However, companies should approach unpopulated market spaces with a dose of caution. Before you invest big to attack white space, ask why the market is uninhabited. Perhaps a technological constraint, regulatory barrier, or entrenched behavior stopped its development. That suggests an opportunity. But there are three, less promising possibilities:
- A stated customer need isn’t a real customer need. As I’ve written, one of the dirty little secrets of innovation is that consumers lie. They don’t even accurately report behaviors they follow today, let alone things they might do in the future. This isn’t out of malice; our brains just aren’t good at this task.
- Powerful stakeholders can inhibit the adoption of a new idea. While it is easy to point the finger at regulatory barriers, any market that has multiple stakeholders can have a powerful constituency whose needs stand in the way of innovation. Consider the delicate balance between patients, family members, physicians, hospital administrators, and insurance providers in healthcare.
Scott D. Anthony is managing director of Innosight Asia-Pacific.