QCA Bootcamp Insights: Opportunity Validation
(EDITOR’S NOTE: As mentioned in Tuesday’s feature article about the recent visit of the top leaders and others from Queen City Angels to Knoxville and the “Entrepreneurship Bootcamp” that the organization conducted, this is an article that summarizes advice offered to local entrepreneurs during the session.)
By Tom Ballard, Chief Alliance Officer, PYA
Sally Kay spent 36 years with the Dow Chemical Co. and GlaxoSmithKline Consumer Healthcare, spending the last 25 years of her career leading innovation and new product development. Today, she performs consulting work in strategic product development as an active supporter of Queen City Angels (QCA).
During the recent “Entrepreneurship Bootcamp” that the organization conducted in Knoxville (see Tuesday’s teknovation.biz feature article here), Kay spoke about a topic that she knows a thing or two about – “Opportunity Validation: Do you really have a product?”
Noting that she was a Tennessee native, Kay offered a wealth of insights that many entrepreneurs have no doubt heard in one venue or another. That said, her thoughts are worth summarizing here.
She started with asking two questions: do you really have a product or service, and do you have a viable and sustainable business opportunity? “Replace your assumptions or hypothesis with facts and data,” Kay said, reminding us of the all-important customer discovery process. Explaining that validation leads to building a successful product, she said that “you need relentless market and customer focus. Failure teaches us the best lessons.”
Kay cited two CB Insights reports, the most recent conducted in 2018, that underscored the lack of need for the product, running out of cash, and failure to raise new capital.
“Don’t fall in love with your solution, fall in love with the problems your customers are trying to solve,” she reminded the entrepreneurs in the room. Her key steps in the opportunity analysis process were: (1) review the existing market; (2) understand the potential market opportunity; (3) define that market and its potential as fully as possible; (4) understand the distribution channels to reach the market; (5) identify the competition and the barriers to entry; (6) define your entry strategy; (7) identify trends impacting the targeted market sector; and (8) identify your exit strategy.
Kay noted the emphasis that many potential customers have around sustainability and another trend that should help tech-based start-ups. “There’s been a corporate shift from not invented here to proudly found elsewhere,” she said.