Understanding your Opportunity
Your first step into product development starts with identifying an opportunity. Seeing this gap in the market, the innovation in waiting, that is why you’re here. Having the passion to act on it is what makes you an entrepreneur.
At a high level, it is helpful to understand the type of opportunity you’re pursuing. This allows you to understand how hard it may be to research user behavior, how much users may expect from your product, and how that equates to risk. There are four different types of opportunities:
- Breakthrough
- Incremental
- Whitespace
- Disruptive
Breakthrough
Breakthrough opportunities create a brand-new solution for an existing market segment. This can be a rewarding venture as this new solution is often patentable.
- Market Behavior: Should be somewhat known and predictable
- Consumer Expectations: There may be a few alternative solutions already in the market, so expect a moderate level of pre-existing user expectations.
- Risk: Moderate; solution is not proven or widely accepted.
Incremental
Incremental opportunities make small improvements on existing solutions in existing markets. You commonly see these types of innovations in staple consumer goods such as computers, televisions, appliances, etc.
- Market Behavior: should be somewhat known and predictable
- Consumer Expectations: There are already products in this space, so expect significant expectations.
- Risk: Low; significant product data to rely on
Whitespace
Whitespace opportunities use an existing solution in a new or underserved market. For a while you won’t have any direct competitors, but if you prove there is money to be made your competitors won’t be long to follow.
- Market Behavior: In a known but underserved market, behavior may be somewhat predictable. In an emerging market, behavior may require additional understanding.
- Consumer Expectations: Should be low, this is a new product for them
- Risk: Moderate; market behavior is not as predictable.
Disruptive
Disruptive opportunities create brand new solutions for new or underserved markets. These are rare and they change how the industry operates and cause disruption for competitors. A successful disruptive product stands to see significant rewards.
- Market Behavior: In a known but underserved market, behavior may be somewhat predictable. In an emerging market, behavior may require additional understanding.
- Consumer Expectations: Should be low, this is a new product for everyone
- Risk: High; market behavior is not as predictable and solution is not proven or widely accepted.
Moving Forward
Once you’ve classified your opportunity at a high level, you can focus on understanding the needs of your specific market and what your competitor landscape looks like. In order to build a successful product, it is critical to have a deep understanding of both your user’s and customer’s individual wants and needs (yes, your user and customer may be different). Your product, your company, and your brand must be built on addressing those needs better than your competition.
In our next article, we’ll focus on understanding those needs.