Your Minimum Viable Market
Minimum viable market is one of the hardest things to understand about marketing. It’s counter-intuitive. How is better to target a smaller market? We’ve all been there. At a business network meeting, you ask someone who their business is for and they reply: my market is everyone! I’ve done it myself and so have you. But not knowing your minimum viable market may damage your business.
Minimum Viable Market
In the early years of your business, until you are clear about your offer, lack of clarity about your minimum viable market is unavoidable. Businesses fail if they don’t address this but it is a slow burner.
What is your minimum viable market? It is the smallest market that generates the turnover you need for a viable business. Too small and your business cannot grow. Too large and your business lacks focus, trying to be all things to all people.
The idea is particularly important for niche businesses. When businesses enter the mainstream, they inevitably standardise their offer. They design an offer to appeal to the widest possible market. This is a difficult transition to make and it is made only where a business develops a product with mass appeal.
Who Are They?
They have a problem and you have a solution. This key unlocks your minimum viable market. Before anything else, identify the problem you solve. Define it carefully. Describe it in crisp sentences with detail.
The hard part is identifying those who share the problem. Understand how they experience the problem. They may not realise they have have the problem. Or they know they have it but do not believe it can be solved. These are two distinct positions, requiring different approaches.
You make voluntary decisions about your market. Choose to market to one sex or in a specific geographical area, for example. You make these decisions for reasons of preference or convenience. Is it discriminatory? Not necessarily. If you provide a service for a specific group, you hone your service to appeal to that group. For example, hairdressing is different for men and women. There’s no reason why a women’s hairdresser can’t provide the service for a man. Most men prefer the male version but possibly not all. The few men who prefer to use a women’s hairdressers are a secondary market. Any marketing the hairdresser practises will be to their usual market of women. If a man approaches them, they decide whether they provide the service.
A service promoting itself for one group is usually accepted. Problems start where a service with no stated preference discriminates. A recent case where a cake decorator refused a cake for a gay couple for religious reasons, was problematic because the shop could not define a market that did not include gay couples and so some argued it was discriminating on grounds of prejudice. Defining on grounds of demographics is fine so long as it does not discriminate against legitimate users.
What Do They Believe?
Let’s follow the cake decorators a bit further. They were accused of discrimination on the basis of faith. They became known as followers of that faith and so may find they attract customers who share their faith. People who agree with may start to go there to get their cakes iced. Equally, those who disagreed may go elsewhere.
Businesses often talk about the need to know like and trust. This is a powerful positioning tool. It is possible choices are seen as discriminatory and so business owners must take care what they say. But a business owner’s worldview need not be discriminatory. Mostly it doesn’t matter whether we agree on a particular issue. But someone who knows me is likely to know where I stand and might choose me on that basis.
My general worldview can be important. For example, I emphasise the contributions business people make beyond making a profit. I buy from business people who take a very different view on this issue. So, I know that worldview is important not because it attracts like-minded people but because it flags up what to expect. If someone needs support over a particular problem, they may explore whether I can help them precisely because I do not share their worldview.
Conclusion
In terms of business failure, there are two issues. One is to fail to define a minimum viable market. This leads to marketing with no focus and is likely to attract no-one.
The other problem is where, defining your minimum viable market, you deliberately or inadvertently apply the wrong constraints to your market. These may be perceived as discriminatory or else do not attract the people you thought it would. Examine your own motivations here – if you attract people who are not the ones you expected, who’s to say they are not your market? Maybe you need to overcome your own prejudices first!
A lot depends upon reading the context in which you market your business. Another dimension to business depends on context: technical solutions. Implementing a new technique can be fraught with disaster!