Week 87: Market Segments

In this week note, we talk a little bit about market segments or the lack of them.

If you choose to operate outside a specified market, it often means that you have to define the market segments in which you want to operate and why people actually need you.

While nothing is ever completely new or unique, our decision early on was not to take on a specific market segment, but follow the things that interest us and build a business around that. While it is very satisfying, it is of course more challenging then operating in a pre-defined market. As a company that provides service, you not only have to be picked from a list of competitors, you actually have to make the client understand why he needs your service in the first place. While many are crying wolf here and blaming the client, I still remember Matt’s words: “If the client didn’t get it, you explained it wrong.” In most companies budgets are still redistributed according to very classic models. That results in the following scenarios:

  • You start a conversation with one department and don’t get picked, because the way you present yourself increases the risk for the department. They will be probably be very interested in the work you are doing, but unless they can assess the situation in a way that makes them feel safe to pick someone who reaches for the stars instead just for the budget, they will probably not pick you.
  • You are still having a conversation with one department, but now you found someone inside a company who is eager to try new things. Be that either because he’s “a true believer” or, to put it in Ton’s words, “the guy in the blue shirt”, Ton’s term for someone who evangelizes an idea inside the company. The other option is: This person sees an opportunity to make a career with the help of the work you are providing. Either way, this situation is good for you and opens up at least the possibility of starting a long-term relationship. Tread carefully here, though. You might end up compromising too much. You are still on the payroll of one department and unless you helped redefine the various goals of this department – which is hard, but not impossible – you will still have too help them match first those and then your long-term vision of where things should go.
  • You are hired by multiple departments inside of a company. This is the most interesting, but also the most challenging situation for you as a company. On the one hand, you are invited to get a unique look into a big corporation, get access to information that wouldn’t be accessible otherwise. It is also likely that you will get paid better, because there are different budgets to be accessed here. This, though, is also the downside of it. Working in that kind of constellation will require of you to be involved in a lot of politics, have private and semi-private conversations. It is a lot like playing chess. If you up for it, is a great game and you will enjoy a lot.

We have been in all three situations described above. There is no one solution, nor will there be every just one market segment in which we operate. This is hard at times, but it’s definitely not boring.

Meet us

Later this week, Peter is headed to the Silicon Valley for Tim O’Reilly’s Foo Camp. He’s going to be in San Francisco for a few days around the conference. If you want to meet up, ping him. Johannes will be at the Data Science Day Berlin on Wednesday and at DMY for the Open Innovation Forum on Thursday.