If you’re familiar with Lean Startup methodology, then you’ve heard of a minimum viable product. But a product only makes sense in the context of a customer. So the first step is to nail down your minimum viable segment.
So let’s start by defining what we mean by a market segment:
a discrete set of people with three things in common:
They have the same need. In other words, they are trying to solve the same problem, or satisfy the same hunger.
When choosing between competing ways of solving that problem, they use the same selection criteria. So if one set of people chooses primarily on the basis of price and another on the basis of quality, they are in different segments.
Finally, when finding out and/or buying a product or service, they use the same channels.
For example, somebody who prefers to buy a book online is in a different segment from someone who prefers to buy the same book at a bookshop.
Choosing what segment to focus on is one of the most important decisions you make as a startup. Failing to be disciplined enough to focus on one is one of the main reasons for failure. This focus is essential for any business, but especially so for startups. You generally have very limited resources, so it’s essential that you focus them as much as possible. If you spread them too thinly trying to address a bigger market than you can initially handle, you will almost certainly fail.
In the context of Lean Startup, your choice of segment depends on who you think most needs your product. You need to make this hypothesis as minimal as possible so that you can test it. You also need your segment to be as small as possible at this stage because you need to dominate it. This will give you the credibility and experience to expand to other segments. At the same time, the segment needs to be large enough to be viable. It needs to produce enough demand for you to make a profit.
Marketers have traditionally defined market segments by demographic variables such as socioeconomic, background, age, gender, even race or culture. There is some logic to this. For example, it’s reasonable to assume that the market for dance clubs is primarily mostly made up of twenty-something singles.
Design thinkers have essentially used the same approach when using personas to describe segments.
However, this approach is limited and sometimes misleading. A better approach is to define your segment by the job-to-be-done. This approach takes the view that customers “hire” products and services because they have a context specific job which needs doing. When you look at segments through the jobs-to-be-done lens, you get a much clearer idea not only of what customers want, but what your product’s real competition is:
Consider, for example, a job-to-be-done scenario that arises millions of times on morning subway trains and buses:
Crowded commuters want to pass the time productively.
A free, single-section, easily folded newspaper called Metro has been positioned for this job and is read daily by tens of millions of people. It does not simply compete against the major metropolitan dailies; it competes against conversation with strangers, paperback novels, iPods, mobile phones, Kindles and boredom.
A further advantage of segmenting by job to be done as opposed to demographics or product categories is the focus on customers’ context specific motivation for getting a job done, as well as their emotions. This understanding is essential to designing products and services which address your customers’ real needs when they are trying to get a specific job done.
Part 1: Introduction - https://steemit.com/startups/@sroka87/how-to-launch-a-start-up-introduction