Market types

up: Marketing
From Four Steps to the Epiphany

Kinds of startups:

• New product in an existing market: your product offers higher performance than what is already offered
• New product in a new market: the product creates a new market because users can do something they substantially couldn’t do before. Product features are irrelevant initially because there are no competitors.
• New product resegmenting existing market by being low cost: Are people willing to buy “good enough” for a significantly lower price
• New product resegementing existing market by being niche: more valuable, even if it costs more.

	Existing market	Resegmented market	New market
Customers	Existing	Existing	New/New usage
Customer needs	Performance	1. Cost 2. Perceived need	Simplicity and convinience
Performance	Better/faster	1. Good enough at the low end 2. Good enough for new niche	Low in “traditional attributes”, improved by new customer metrics
Competition	Existing incumbents	Existing incumbents	Non-consumption / other startups
Risk	Existing incumbents	1. Existing incumbents 2. Niche strategy fails	Market adoption