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It is risky to base a business plan solely on abstract forecasts without real contact with customers. Many entrepreneurs go astray by relying on general market studies that lead to unrealistic projections. It is essential to understand the actual needs of customers by conducting interviews and creating a community around one’s product. Testing an innovative concept through events can also provide valuable feedback and enhance the project’s credibility. Once in the commercial phase, continuously improving the customer journey and listening to feedback, even from non-customers, allows for improving the offering and gradually satisfying a broader customer base.
E. Krieger
If my DNA were sequenced, numerous genes common to those of the inventor of Excel would undoubtedly be found. I certainly have an irrepressible tendency to model everything that moves, but there are limits to this type of addiction, especially in entrepreneurship.
Indeed, it is perilous to rush to your favorite spreadsheet to make “groundless” activity forecasts. Yet, this is precisely what many entrepreneurs do, especially when asked to present a duly quantified business plan. The risk then is to mistake dreams for reality.
It is just as dangerous to engage in « armchair strategy » by compulsively consulting general market studies without meeting real potential customers. What aspiring entrepreneurs call their « market » is often just a description of their industry, whose size is made up of a series of transactions generally not comparable to what you will be able to sell.
Overcoming Procrastination and Optical Illusions
The illusion of precision reaches the sublime when these same candidates undertake to methodically segment the blur using the acronyms TAM/SAM/SOM: Total Available Market, Serviceable Available Market, and Serviceable Obtainable Market, where the SOM generally hovers around 5% of the « big market, » allowing one to fantasize about a segment « just for you, » both juicy and easily accessible.
Such approaches result in a shaky business plan with little chance of thriving if a tangible need has not been genuinely analyzed and a robust value proposition formulated.
Indeed, it is essential to have a fine understanding of the issues faced by the actors within the ecosystem you wish to operate to avoid reinventing the wheel or, worse, pretending to solve a need that no one really expresses.
During the Launch Phase
Here are some tips to facilitate your work in detecting innovation opportunities through simple field actions. These actions will be both rich in lessons and will reassure your potential partners about your commercial and financial realism.
- Survey your potential customers and industry experts: conduct several dozen interviews directly and/or via focus groups. Before making « macroeconomic » inferences, this will allow you to collect verbatim, « pieces of customers, » as my colleague Frédéric Iselin calls them, who insists on the need to understand the precise nature of the need that is unmet or poorly met by existing offers and on which various stakeholders stumble, beyond the final consumer alone. For example, the desire to lose weight is not necessarily the primary motivation: it could be health issues, a wish not to change one’s wardrobe, or more prosaically, to boost attractiveness on certain dating apps. Each segment is specific and cannot be reached in the same way.
- Create a community and distribute content: by publishing on various social networks, a personal blog, or even a dedicated website, you can methodically explore various facets of an issue, gradually becoming a specialist. Before its creation, the co-founders of the company émoi-émoi created a blog about fashion for pregnant women, which allowed them to build a community of future customers and a network of brand ambassadors. This content creation strategy even helped them find investors.
- Organize events to test your concept: such initiatives, which can range from simple conferences to full-scale tests, will increase your visibility and provide additional feedback from your potential customers and partners. Before opening their first restaurant and developing a unique restaurant group in less than 10 years, the founders of the Big Mamma restaurant group tested their concept at the HEC Paris cafeteria. This allowed them to refine several aspects of their project. With over 500 daily sales, the credibility of their project was demonstrated, and the two entrepreneurs were able to secure their first round of funding with an excellent valuation.
When You Already Have Customers
When your business is already in the commercial phase, the challenge is different: it is about optimizing the existing to grow more quickly and qualitatively, notably by moving from your early adopters—those who are « ready to pay the fastest and the most, » in the words of my colleague Frédéric Iselin—to a larger but also more demanding segment called « early majority, » estimated at one-third of your target customer base, who wait for feedback from the first customers before buying a new product or service.
Again, systematic fieldwork will allow you to refine your value proposition and improve your commercial action, notably through the following actions:
- Methodically analyze the entire customer journey: such work will reveal potential friction points or, conversely, dimensions highly appreciated by your customers. This work, conducted with real estate agencies, buyers, and sellers of real estate, has enabled the Guy Hoquet real estate network to strengthen its position among the sector leaders.
- Invite all your teams to customer support: there is nothing like an exchange with a real customer to understand what can be problematic in the presentation or functioning of your offer. Regular involvement of all your associates and employees in the « customer hotline » is a boon for team cohesion and incremental innovation.
- Survey « non-customers » as well: while listening to a dissatisfied customer is crucial for effectively addressing such requests and bolstering your commercial reputation, listening to « non-customers » is also an excellent way to understand, even before they use your products or services, what might block the purchase decision.
Therefore, there is no need to be a geologist or cartographer to make the « field speak » in entrepreneurship and innovation: a little method and a lot of empathy are enough. Through this fieldwork, you will be able to adjust your business plan, making it all the more robust.
