On Market Opportunities For Start-ups

‘Disruptive’ is a much-abused word in the start-up world and it is a flawed measure that can be used to determine if an opportunity is worth chasing after. Disruption is an outcome and not a starting point; thus it is best left for glowing testimonials in history books than in business plans.

A better measure ascertain a product’s viability, longer term capital requirements and other key metrics in a business plan is to look at things through the prism of market opportunity. Opportunities can be of the following types:

Greenfield Opportunities: These are products and services that break new ground, building and doing things that have never been done before at any reasonable scale. Example: A car that flies.

Innovation Opportunities: These are products and services that take an existing product or service and approach it from an innovative new angle. Example: A car that costs as same as a regular car, but runs on water.

Execution Opportunities: These are products and services that don’t do anything new, but they do what is already being done in a much better manner. Example: A car that does really nothing new, but it is well put-together and everything feels just right about it.

Pricing Opportunity: These are products and services that are offered at a price point less than what the customer is used paying for a similar service. Example A car that costs half the price of a similar specification model in the market.

Any new start-up or a product has to be very clear within themselves which of the four opportunities do they address, before they hit the market. It also makes things easier for investors to understand your product if you are clear about the opportunity you are after.