Today I spoke to a team of entrepreneurs who wanted advice about what to do with an idea to sell biologically degradable packaging made from agricultural byproducts. After listening to them talk a bit, we examined the following:
- Can the customers use the more expensive packaging to gain new market share? That could be possible for a giant corporation who decides to jump on the "green wave" and change its image to attract a new segment of buyers. In food, Nestle has been brilliant at that recently.
- Should you be a sales agent organization for a new market segment? In new markets, often customers do not know where to go to find what they want. A startup can make money if it collects the rights for selling such products to such customers.
- Could you become a distributor of the best products of the new market? If the first products are arriving, but the customers are hard to find, you can become a distributor of the best and buy wholesale and sell directly to the customers.
- What do you have that can give you a manufacturing edge? If you have fresh technology, you can then manufacture (or outsource) and sell to customers. That will work well if the market is beginning to already take shape and start to grow.
BOTTOM LINE: As you spot a new market emerging, examine what you can do to exploit it. That may be easier than you think. The clearer the market is, the more you will have to make something and sell it. Picking the right business model makes all the difference. Debate it carefully.