Beachhead Market

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The Merriam-Webster Dictionary defines a beachhead as “a beach on an enemy’s shore that an invading army takes and controls to prepare for the arrival of more soldiers and supplies.” The analogy for entrepreneurs is that to optimize your chances of success on time, you will employ the same game plan, choosing a small market segment you can control until your company has sufficient resources to enter other markets.

First, ask yourself:   Are the markets from your Market Segmentation in Step 1 well-defined enough and small enough to attack successfully and not only conquer but dominate? You will compare each market against the three conditions that define a market, which I have refined from Disciplined Entrepreneurship and focused on the end-user:

1. Same product: The end users will all use the same product. If you have to make slightly different products to appeal to the different end users in your market, it’s too broad of a market.
2. Same sales process: The sales process to the end users will be the same, meaning interchangeable language, value proposition, sales channels, etc. If your salespeople have to change tactics from one end user to the next, your markets are not targeted enough!
3. Word of mouth: There is strong word of mouth between end users in this community. If your end users don’t talk to each other—if they are separated by large distances, for example—you’re going to have a hard time building up sales across the full group of end users. Refine it!

Use the Market Segmentation Certification worksheet at the end of this chapter to analyze the markets from your Market Segmentation, then go back and refine your markets if necessary—it’s almost always a requirement to further segment your markets.

Once your Market Segmentation is sufficiently refined, it’s time to choose your Beachhead Market. A few tips:

• Involve the whole founding team. Presumably, you’ve already refined the composition of your team somewhat in Step 1; continue to do so here. You want to finish this step with increased cohesion on your team. You also want to identify and address any team dynamics issues. You haven’t worked together much, so you’ll likely have some issues. Be honest about them, and recognize and address them professionally. If you don’t do it now, you’ll pay a steeper and steeper price as time goes on—in my experience, failure to address team issues upfront is the number one reason companies fail. The hardest part of a startup is not technology or strategy, it’s people.
• Avoid “analysis paralysis.” There is almost always more than one path to success. Your goal is to eliminate the paths with the lowest odds of success and choose one path with relatively good odds. Then, take your chosen path and pursue it without thinking about “what could’ve been”—burn the boats! Pursue it until it proves not to work or is much less attractive than originally anticipated.
• Keep doing primary market research! Part of why you narrow your selections is because primary market research is time-consuming and expensive in terms of opportunity costs, so you want to focus your research on compelling candidates for Beachhead Market. But don’t stop doing primary market research just because your Market Segmentation is done. You have only just begun!

You’ll consider the same eight key criteria that you used during the Step 1 Market Segmentation:

1. Is the target customer well-funded?
2. Is the target customer readily accessible to your sales force?
3. Does the target customer have a compelling reason to buy?
4. Can you deliver a whole product?
5. Is there entrenched competition?
6. Can you leverage this market segment to enter others?
7. Is the market consistent with the values, passions, and goals of the team?
8. How quickly can you win this market?

Use the Beachhead Market Selection worksheet to compile your notes on your potential Beachhead Markets and to rank and make a decision about which will be your beachhead. It may take several iterations, and you might not end up being right with your ultimate selection. But if you later determine your selection will not work, you can always come back (much more easily than if an army chooses the wrong beachhead!) and restart at this point with more confidence and skill in executing the process. For now, you want a good amount of confidence that your structured analysis and plentiful primary market research have brought you to this reasonable decision.

Finally, before you move on to the next step, all of your team members must sign the Agreement on the Beachhead Market Selection. It is important that everyone is on the same page (literally!) and that they are enthusiastically behind the direction your company will be going in. Companies that thrive in their Beachhead Markets are companies with strong cohesion and unity.

Content will be published as it becomes available.

Content will be published as it becomes available.