Start-ups: Understand what you mean when you say "market"

Re:Start-ups: Understand what you mean when you say "market" by wisty on Friday March 23, 2012 @02:53PM (#3746567)

The biggest point this is missing - the cost of acquisition. If you sell your product to 0.1% of China, you'll have tonnes of revenue. If you have to send salesmen out to knock on half a billion doors to get that 0.1% to buy, your profits won't be so hot.

Or, you could buy adwords. You can try a "viral" strategy, which magnifies your acquisition (by a factor you can calculate - if 90% of your customers can sell to a friend, you get 1/(1-0.9) = 10X the acquisitions you'd get without the viral strategy), but it's not a holy grail unless every customer brings in more than 1 friend. Guess how often that happens?

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Re:Start-ups: Understand what you mean when you say "market" by destraynor on Friday March 23, 2012 @03:13PM (#3746661)

Hey Wisty,

Good point. I left this out as I wanted to do a separate post on the importance of profitably acquiring customers for start-ups, but there's a big overlap here with the dangers of hitting large markets that I should have included it.

Cheers, Des

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Re:Start-ups: Understand what you mean when you say "market" by debacle on Friday March 23, 2012 @03:57PM (#3746918)

> but it's not a holy grail unless every customer brings in more than 1 friend.

Only one customer in ten has to bring in more than one friend for you to see exponential growth. While I don't disagree with you, that's kind of the idea behind most Internet startups.

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