Timo Miettinen // January 22 2016
The importance of designing for one
So you have found the ultra lucrative growth market that will be ripe to generate billions for everybody involved in the industry.
Including you. Big bucks. A share of that pie, oh boy, and you would be heading to the local Ferrari dealer!
With this approach, chances are that you will never sit behind the steering wheel of the Caballo Rampante. There is a real trap of building a business plan based on big numbers and large markets instead of focusing on creating a solution for just one customer.
Take any large market and set a target to capture a certain share of the market, and your Excel will show a serious business case almost regardless of the size of the market share you will be aiming. 1% of billion dollars is 10 million, which sounds nice. The IOT market is forecast to be 150 Billion dollars soon, or more money that you can think of. Surely, I can grab a share of that, right?
The problem is: this top-down method of planning tells more about the business potential, and less about the actual turnover that you can generate. Do you have any chance of actually getting any share of that pie?
The targeted revenue is a utopia, until you get the customers to buy from you.
Living in a utopia is … well, not for you.
To avoid the pitfalls of living in a dream world, consider the alternative approach instead: design your stuff for just one customer, bottom up.
Yes, just one.
Figure out what makes a single customer click so that s/he decides to open the wallet and buy from you.
This is the most important thing to get right in the beginning: the value proposition of a single customer. Whatever you do, needs to work one-on-one or it doesn’t work at all.
Over time, let the small numbers convert to big. One win, one invoice, one charge at a time.
When starting a small business, every new day starts with a disbelief seeing no payments in the cash register, and in the course of the day you see how the figures mount up to a total tally for the day.
This is the way how the millions and billions are made. You win the heart of one person at a time, make him happy and hopefully loyal to return again as a customer. When you can repeat the sale time after time, you can start scaling up your business.
What you don’t do is to convince a 10% of a market of 100 Billion during the next 12 months.
You do it one by one. Day after day.
Now this is a sobering thought and sets practical priorities for creating a feasible plan for a new business or product. After identifying the market you want to address, the most important thing in the plan is to focus on designing remarkable value for the customer and verifying that the value actually is there.
Get the small things right. The big numbers will follow.