Innovation drives growth across industries, pushing companies to continuously develop new products. However, knowing how to identify the right market for your technology can be challenging in today’s rapidly evolving landscape.

Before entering the market, clearly define the problem your product solves and articulate your unique value proposition and potential applications. This should also allow you to have an idea of who your targets are.

In the following article, you will understand how to effectively identify the right market for your technology. We will guide you through key steps, including defining your value proposition, gathering customer insights, validating market demand, and positioning your solution for success. By following these strategies, you can minimize risks, attract the right customers, and build a strong foundation for market entry.

1. Customer discovery and feedback

Identifying the right market for your product involves thorough research but this also where you can clearly identify the right market for your product.

The best way to avoid pain later on is to engage and talk directly with potential customers through interviews, surveys, and prototype testing to gather meaningful feedback.

Focus on gathering real feedback. Ask open-ended questions to encourage detailed responses. Avoid simple yes/no questions that don’t engage potential customers in conversation.

2. Market Validation

After understanding your customers, validate the demand for your solution and ensure you can reach your market effectively. One example of a successful market validation process should be as follows:

• Develop an MVP: Use feedback to create a minimum viable product (MVP) that addresses core customer needs.
• Iterate and Test: Add or modify features based on customer feedback and prepare prototypes for further testing.
• Continuous Feedback: Keep collecting insights to refine your product and validate market interest.

At Techfinders, we introduce a continuous market validation approach for manufacturing innovation projects. Learn more here.

3. Sizing the market

Estimate your market size and revenue potential using top-down, bottom-up, or value-based approaches to calculate:

• Total Addressable Market (TAM): The total revenue potential with no competition.
• Serviceable Addressable Market (SAM): The portion of TAM your product can effectively target.
• Serviceable Obtainable Market (SOM): The share of SAM you aim to capture.

Accurate market sizing is crucial, especially when seeking investment. Aim for a market size of at least €1 billion, but remember, initial estimates can significantly underestimate future growth, as seen with Uber’s expansion from €4 billion to €30 billion.

For example, imagine a 3D printing manufacturing company specializing in high-precision metal printing for industrial applications. The global metal 3D printing industry, covering all potential applications across industries, is valued at €20 billion, which represents the company’s TAM. Within that, the aerospace and automotive sectors alone account for €5 billion, forming the company’s SAM since these are the industries it can effectively serve. However, given market conditions, competition, and operational capabilities, the company realistically aims to capture €100 million within five years by focusing on high-value clients and offering superior customization—this is its SOM.

By understanding these figures, the company can refine its business strategy, prioritize resources, and present a compelling case to investors.

4. Market Positioning

Differentiate your solution from competitors by crafting a unique selling proposition (USP), tagline, and pitch that communicate your value proposition and competitive advantage.

This process defines your brand identity, personality, and voice.

• Refine Your Offering: Prioritize core features based on feedback.
• Go-to-Market Plan: Develop a strategy that includes targeted marketing, pricing, and funding considerations.
• Build a network: Assemble talent, consider partnerships, and generate buzz through community building and brand awareness campaigns.
• Prepare for Launch: Create marketing materials, pilot your strategy, and set measurable goals. Stay flexible and adapt based on feedback and data.

5. Market Strategy

Develop a robust strategy to enter and grow in your market by setting and tracking goals, objectives, key results, and key performance indicators (KPIs). Plan your marketing mix, pricing, distribution, and customer retention strategies.

• Distribution: Secure at least one effective distribution channel.
• KPIs: Identify and track North Star Metrics crucial to your success.
• Customer Retention: Distinguish between satisfied and loyal customers and develop strategies to foster loyalty.
• Pricing: Explore different pricing methods to find the best fit for your product and market.

At the end of the day, you should be able to answer these questions:

The problem you’re solving: What gap are you filling? Why should anyone care?

The solution you’re offering: What’s your magic potion? How are you making things better?

Who your customers are: Who needs your awesome solution? Where are they hanging out?

How to reach them: Are you shouting from the rooftops or whispering sweet nothings in their ear (marketing channels, yo)?

How you make money: Cha-ching! How does your solution translate into euros?

What it costs to run the show: Gotta keep the lights on, so factor in all your expenses.

At Techfinders, we specialize in helping technology developers validate their market potential and connect with the right partners. If you’re looking for expert guidance to refine your strategy and ensure a successful market entry, let’s get in touch!

ABOUT THE AUTHOR

Rui Oliveira

Marketing Specialist

Rui is a digital marketing specialist with a passion for innovation and technology adoption. He focuses on helping businesses effectively communicate their value propositions and reach the right audience through strategic marketing initiatives.