Entrepreneurship Part VII: Your Target Market

One of the most thought provoking chapters of the book The 4-Hour Work Week is the one on product development. One  reason it is thought-provoking is that it recommends approaching product development in almost the opposite way that most entrepreneurs follow. Here is how most people seem to think entrepreneurship works:

  1. Think of an idea
  2. Raise funding
  3. Build the product
  4. Price it to cover your costs
  5. Find the first customer
  6. Find more customers

The 4-Hour Work Week recommends the following approach:

  1. Take a close look at the people you know
  2. Decide on a product that they would like to buy
  3. Think of a price they would be willing to pay
  4. Get people to place orders for your product at that price
  5. Get the product built at a cost that is low enough to be profitable

Another reason the chapter is thought-provoking is that it recommends treating your existing network of contacts as your target market. People don't normally think in these terms, but it only makes sense: if you cannot sell your product to friends, family, colleagues and others with whom you share a trusting relationship, then what hope do you have of selling it to utter strangers?

Tags: Business, Reading

Created at: 23 February 2009 6:02 PM