How to identify an immature market
How do you know if your market is immature? The easiest way to see is if there are no other companies providing the same solution as you (make sure you do some thorough research on this). But as competitors start to enter the market, it can become unclear how mature it is becoming and how to strategize accordingly.
Here are a few other signals you should look for to identify a market as immature:
- You’re the first mover. No one else has a solution to the problem you’re addressing.
- No competition exists when you’re selling your product or discussing it with prospects.
- Google searches show no other competitors.
- Buying Google ad clicks is cheap.
- High-relevancy keywords have low volume.
- If there are investment rounds (PE, VC, etc.) in your category, they are relatively small and are investing in relatively unknown players.
- If you have paying customers, few have more than one annual renewal with you.
Opportunities in an immature market
Now that you’ve identified your market as immature, you have some big opportunities in front of you, if you can take advantage of them. These can lead to rapid and almost limitless growth we like to call T2D3. T2D3 stands for triple triple, double double double. This is where you triple your ARR two years in a row and double it three years in a row, growing towards $100 million in ARR and the coveted “unicorn” status of Salesforce, Zendesk, Workday, Netsuite, etc.
Here are some specific opportunities that your company can gain by capitalizing on an immature market:
- If you move quickly, you can gain a first-mover advantage, solidifying you as the industry standard for all prospects for the foreseeable future.
- Even if you’re not the first mover, if you’re fast enough, you can gain the second mover advantage and capitalize on the mistakes of the first mover.
- Immature markets have low competition, so you can rapidly gain market share and revenue growth if you present a solution that solves customers’ problems.
Challenges in an immature market
It’s very important to note that you shouldn’t expect to waltz into an immature market and instantly see exponential growth. Immature markets have some significant challenges that require your company to think outside the box, be agile, and become customer-obsessed. If you don’t, your company can easily become stuck in a cycle of lackluster growth while your competition expands.
Here are some examples of challenges that can strangle growth if they aren’t dealt with, appropriately:
- Immature markets are untested, requiring you to spend time and money to figure out if the market is actually interested in your solution and willing to pay for it.
- Prospects often aren’t solution aware or even problem aware, so you’ll need to invest heavily in educating the market early.
- Completely educating prospects means longer sales cycles and longer lead times before marketing initiatives gain significant traction.
- Typical Pay-Per-Click and Search Engine Optimization marketing initiatives may not cause instant growth, because audiences aren’t searching for information about a problem, or solutions to it.
How to create a Go-to-Market strategy for an immature market - “Making the Market”
Moving in an immature market means you’ll have to “make” it before you reap the benefits. This is because young markets have no proven GTM model in place. You’ll have to do the heavy lifting of finding the right type of customers, convincing them that they have a real problem and that your solution is worth spending their time and money on.
One common misconception with immature markets is that entrepreneurs often expect prospects to immediately come to them and magically find their solution. If you’re lucky enough to find a market that has strong problem awareness with no legitimate solution, you’ll be able to use inbound marketing to quickly get prospects’ attention and convert them into loyal customers. However, if your audience isn’t “problem aware” (which is often the case when you’re the first mover), you’ll likely have to go out and find prospects through events, account-based marketing, outbound sales, and interruptive ads (for more information on problem-awareness and marketing appropriately to customers based on their awareness, listen to this podcast episode).
This is hard work and shouldn’t be taken lightly. When you’re starting a market, expect to do a lot of testing as you get going, to make sure you have the right ICP and that your product resonates with your target audience. But if you can move quickly and establish a base of loyal customers, you will set the bar for that market and will be in a great position for T2D3 growth and the coveted “unicorn” status.
Here are a few tactics you can use to “make the market” and establish yourself as the leader:
- Take a stand against the status quo and become the thought leader in the market. Give prospects guidance on why their problems are important & impactful. Show them the way to a better future through industry experience, tips & tricks, and your solution. (blogs, social media, podcasting, etc.)
- Build a community of loyal followers through relevant, thought leadership content.
- Claim SEO positions early. Conduct SEO research to make sure you show up for the most impactful, high-volume keywords out there. Look for problem-based and solution-based keywords to rank for.
- Run Pay-per-click campaigns against relevant search keywords and on platforms where your prospects hang out online. Use engagement rates to refine your positioning & messaging early.
- Attend events and generate speaking engagements to educate the market and get the word out quickly about your solution.
- Focus on winning over the innovators and early adopters. Then build credibility with the early majority through social proof and case studies to “cross the chasm”.
Next steps
Now you know how to identify an immature market, the risks and opportunities it has, and what Go-to-Market strategy elements will help you capitalize on that market. Go build that GTM strategy the right way to separate yourself from the competition and unlock your company’s growth potential.
Here are four steps to get you going:
