“How do I choose which market to enter?”
Someone recently asked me this question, and it’s a GREAT question.
This person already has an audience in one market, but it’s not a market that they are especially passionate about. On the other hand, they are extremely passionate about a different market, but they aren’t yet established in that market.
Which market should this person choose? The one that they have authority in? Or the one that excites them?
This is what I told them (click to watch the video, or read the summary below):
When I’m evaluating markets that I would personally like to enter, there are FOUR main things that I consider:
1) Is this a market that I would actually enjoy working with?
Is this a subject that lights me up? Is this a topic that I want to spend a lot of time dealing with?
Will this market energize me? Am I really passionate about this?
It might not always feel this way, but there are SO many ways out there to make money.
With the amount of time and energy you need to put into your business, it honestly doesn’t make sense to put all of that effort into something that doesn’t ignite your interest.
This is the most important thing that I consider.
If the answer is YES, I move on to the next question. If the answer is NO, I stop right here.
2) Does this market have a clear problem or challenge?
If they don’t, they probably aren’t seeking a solution.
And you and I are in the problem solving business, so if it’s not clear that the market has a challenge or a problem that they are looking to overcome, it will be difficult to offer a product or a service that this market will be interested in.
Is there a gap between where this market is and where it wants to be? Can you help them bridge that gap?
It’s a lot more work to first educate a market about the problem they supposedly need to solve before showing them your solution.
If the answer to this question is NO, once again, I stop right here. If this answer is YES, I move on to question 3.
3) Am I positioned to help serve this market?
Do I have knowledge, authority or experience in this market?
If the answer is no, I ask myself, is there somebody who I can work with that IS positioned to serve this market?
Could I connect and partner with somebody who is positioned to serve this market?
This can be a matter of relationships, research, and outreach.
If the answer to both of these questions is NO, I stop here. If the answer to at least one of these questions is YES, I move on.
4) Is there enough market potential?
Does this market have room for growth? Is there space to build and scale a business in this market?
We’re not always trying to build a HUGE business. Sometimes a small business can be the best fit for you and your market.
For example, my charity World Teacher Aid has a very small team, only 4 members… and we know all of our donors personally!
And yet we’re able to achieve all of our goals and more every year, so growing our team could actually become an obstacle in the way of doing what we’re doing now.
If the market is just too small or too niche to give you room to grow, you need to think about this: can you leverage the momentum from your entry point to grow into something bigger?
For example, the entrepreneurial market is very crowded and competitive, so when I started at the beginning of this year to build my personal brand in this market, I followed a simple rule: become known for something specific.
In my case, it’s helping experts transform their businesses using the membership model.
Becoming known for something specific is the fastest way to grow when you are new in a market, and it gives you the potential to leverage that momentum later when you want to expand your market presence.
Once again, here are the four questions I ask myself to determine if a market is a good fit:
1) Personal interest – am I really passionate about this?
2) Does the market have a defined problem or challenge, or something specific they would like to accomplish?
3) Is there a market fit? Do I have the expertise to serve this market? Do I know somebody who I can partner with that does?
4) Is there room for growth? Is there enough potential in this market to support my business?
Once you get clear on how you define these things, it becomes much easier to decide which opportunities are the right ones for you.
Where entrepreneurs get stuck is when they don’t know how to move forward, because they don’t have a clearly defined criterion for deciding what they want, both personally and in their business.
Oftentimes we get conflicted, like there’s this market over here with a tonne of potential and we could make a lot of money serving that market, but we’re not passionate about it. And then there’s this other market that lights us up, but it’s small and we’re not sure if we could make money doing it.
I’m telling you from experience, 99% of the time the small market that interests you is the one that will work. I’ve known so many people running outstanding business in tiny, obscure niches because they are passionate about what they do.
And when you commit this much time to your business, it matters.
Your turn: What factors do you consider when deciding to enter a market? How do you decide if a business opportunity is a good fit for you?