Leonard Lee – You Will Only Succeed If You Identify the Market Opportunity First
BIO: Leonard Lee is a tech industry analyst and strategy consultant. He is the managing director and founder of neXt Curve, a research advisory firm.
STORY: Leonard shares the most common mistakes he has seen in startups and his advice on dealing with those mistakes.
LEARNING: Understand the market opportunity before launching your startup idea. Invest in advisors to help you understand the structure of the market. Test the market with a minimum viable product.
“Get knowledgeable about your market opportunity, and then target your investments.”
Leonard Lee is a tech industry analyst & strategy consultant, a solution architect, an innovation coach, a startup and board advisor, a Trekkie, and a musician.
He is the managing director and founder of neXt Curve, a research advisory firm based in San Diego, California, focused on providing cross-domain ICT industry research and advisory services to enterprises, startups, and technology vendors looking to differentiate themselves and win in a rapidly changing digital economy.
Worst investment ever
Today, we are going to do things a little differently. Our guest Leornard Lee will share the most common mistakes he has seen in startups and his advice on how to deal with those mistakes.
Determine the value potential of your idea
There are a couple of things that determine the actual value potential of an idea. One is how ready the market is. The second thing is technical readiness.
One of the things that a lot of startups don’t factor in quite well is the economics. You have the idea first, but you fail to think through economics. Think of economics in terms of, first, the value to your target customer who is basically going to be that market opportunity you are pursuing. If you don’t consider that properly, you will be starting on the wrong foot.
Second, think of economics in terms of the technical side. Understand technology in terms of cost. Sometimes your ideas may be great, but they are not economically viable. So your ideas fail because of bad timing.
Do your homework and understand the market opportunity first
Most startups simply do not do proper homework, and therefore, they do not understand the market opportunity. One of the reasons they get into this early phase issue is because they look at these big inflated numbers thinking that the market opportunity is something that it is not.
Here is where the bad investment starts and the startup ends up investing time that gets wasted upfront. Depending on how far they progress down the funding path, they just accumulate money that will probably not generate a return.
Ask the right questions
To understand the market opportunity learn how to ask the right questions. Invest in a group of advisors who can help you question numbers to get a proper understanding of the structure of the market.
Test the market with a minimum viable product
Once you have an idea of where you are in your market, you’ve got your technology figured out, and you are in the early stages, the next thing you need to do is test that market.
It is crucial that startups test their market first because many of them, especially those in tech, are often started by engineers. Engineers are great at designing cool stuff but may not be so great at running the business side of things.
Run a buyers’ need analysis and validate your assumptions. What you think is valuable to the customer may not actually be so valuable. Start with a minimal viable product to help you understand whether your concept will resonate with the customer before you invest a ton of money into the final product.
If you are getting into a hyped market, understand the state of the technology, understand the state of the market and get ahead of it.
No. 1 goal for the next 12 months
Leonard’s number one goal for the next 12 months is to be safe and healthy. He also wants to help as many startups as he can to succeed.