Entrepreneurial education is one of the most essential strategies for sustainable economic development in the contemporary world. Entrepreneurs play a critical role in fostering economic and social development of a society. Although there is no definitive definition of the term entrepreneurship, we can all agree on a process that involves creating a new business venture. However, based on this definition, it is hard to explain who an entrepreneur is in general terms. Some people don’t own businesses, but they have contributed significantly to the success of different organizations in different sectors. And many others invent new methods of service delivery in many organizations. Do we not call such entrepreneurs?
The mainline in the definition of entrepreneurs and entrepreneurship is innovation. They can look at certain situations, access the risks, and venture in to make a profit. Starting a business is a process that involves many steps. It begins with identifying a potential investment opportunity, preferably in a field you are familiar with, then making drawing a clear plan to achieve specified. To do this, you will need capital. This is the initial investment in your business. As the business grows, it is critical to achieving a return on investment that matches your capital. And that means you should identify an excellent and potential market opportunity.
The biggest challenge in entrepreneurship is telling whether a product is to be successful once you launch it on the market. Though entrepreneurship involves taking risks, it does not mean you just shoot in the dark, hoping to take anything the arrow can get. Those who have been involved in product launch understand how precarious the effort may be.
Some would encourage the use of “Lean” as a method to reach a fit market. This method is aimed at seeking input from customers early in the process. It assists in determining whether the product is what people want. If there are any assumptions, the process will let you in to challenge them and seek possible solutions.
Many people, this method is the best approach. However, it is only useful if you already have a viable market. It will not be suitable for those in need of discovering new market opportunities. It can be an excellent approach for optimization, but it cannot assist in determining risks or potential successes for the new product.
Product innovation is a natural step in business development. The greatest challenge comes with a lack of the best approach for discovering the best product opportunities. Since the market is broad, and it is not easy to pinpoint the exact location and action before opportunities shift, it becomes challenging to discover heuristic models. Besides, there has never been a definition of heuristic models.
The challenge above has given rise to the ‘product opportunity evaluation matrix,’ or simply the POEM framework. This conceptual framework presents an account for fundamental market dynamics that can help startup business consider the conditions of the market, and determine the likeliness of an idea succeeding. One can use POEM to pinpoint the strength and shortcomings of a particular idea to know where success is more like to come from. This is the best approach for determining the right market for a product. It can help them make a more informed method to know whether it is good to build a new product in the first place. Instead of building, hoping that customers show up, you can simply stop the production in the preliminary stage altogether.
POEM is comprised of five crucial areas that drive understanding for market opportunity. They include:
This part starts with clearly identifiable customers. One can filter all customers; they have to come up with a specific list of potential prospects. It also presents essential problems to solve, segmented market, customer accessibility, and customer loyalty.
This part deals with a focus on a tight niche with a no-network-effect. The Lean method is viable at this state since one already has the focus customer and knows the possibility of a sale. It encompasses team-to-market fit as well as virality.
Proper timing for a product launch is critical for a business. In this segment, one is introduced to secular trend alignment, recent innovation filters, market inefficiency, recent competition surge, and signs of commoditization. It is all about knowing when and where it is more effective.
High competition can be a reason for a product to fail. In this segment, to will understand here limited competition lines, competitor fitness in comparison with your team’s fitness, what defensive position to take as well as barriers to entry. It is all about researching your competition and creating a countermeasure.
It is vital to keep taps on health margins before you start an investment. This segment shows it to you. Apart from this, it shows demand constraints, supply constraints, sunk costs, and cash flow requirements. These metrics are vital to measuring success and failure against profit and loss.
Let’s think of the metaphor of how a cell phone provider can detect the location of your device. Mobile phones connect to networks via cell towers. The cellular device has to be close to that tower to receive signals. The cell tower operates within a specific radius; hence it can approximate the proximity of a cellular gadget. By adding
a second tower, one can achieve directionality, and with a third one, you can be most sure of where the device is.
This same concept applies to the dynamic market. Opportunities are always shifting from one point to another. You only need a few points, to connect that dots and reaffirm the possible location for current opportunities. The positions, in this case, include external factors such as competition, customer, and timing mentioned above and internal factors, like the product and finance. Putting together these factors can help you have a stronger understanding of where you want your product to be.
There are many other open-source frameworks, such as SWOT and The Business Model Canvas, that can help you pitch your product better. These helpful strategies can get your planning, execution, and management aspects underway.
Apr 08, 2020