Dear Author,
Reference to Point # 3. Why do I need to solve a problem or address a pain point? There could just be a new opportunity or platform that makes business sense. What problem did Taco Bell solve? It just found a space for itself in the QSR format with a unique offering. Similarly, did Bira Beer solve any problem? There were quality global and domestic beer brands available in India, priced similarly, offering similar taste and kick. Bira got away with great branding and positioning while largely being a ‘me-too’ product. What about Chumbak? Just quirky accessories to create a space for itself or expanding the accessory market with some design innovation.
Would you rather combine Points # 3, 4, 5 and term it as Market Offering / Gap Identification?
Thanks
Dear Kartik,
Thank you for your keen observations. A business that solves a pain point (or an assumed pain point) surely finds customers as well as investors more easily than one that is offering a me-too product. If you DO choose to be a me-too player, ensure there is value plus in your offering as opposed to players already in the market. A Taco Bell in India saw the need (this could qualify as pain point) for good quality, authentic (debatable to me if TB fits this!), tasty, consistent branded Mexican food. In an aspirational India, where the rising middle class is looking for new culinary experiences, the QSR format was affordable and since there weren’t many others offering this cuisine at these prices, this became Taco Bell’s USP. Bira might have established itself with great branding but it sold its Lite version as being low on calories (a pain point perhaps? Hence trying to attract people – especially women – afraid of the beer belly) because it did foresee people asking – what’s different about Bira? It launched its strong version to challenge larger commercial entities (me-too) because Bira believes there’s enough market for more players.
As for Chumbak, its USP is its design. The pain point is not just accessories – the pain point is lack of QUIRKY accessories in the market (young, vibrant, fun, unique stuff that millennials want) except those provided by one or two brands like Happily Unmarried, The Wishing Chair etc.
I continue to believe that a business that has clarity on the pain point it is solving (a need gap in other words), a solution for this pain point and a USP that makes it different from other available solutions has better chances of grabbing investor eyeballs and will be more welcome in the market than just another me-too.
The me-toos that I think do succeed are ones that are able to see mass demand – you could always offer good quality beer or food to a billion plus nation (even without any USP) and if the quality is half decent, you are bound to win simply by sheer numbers and pricing! In this case, you can surely combine points #3,4,5!! But would you rather not stand out?
So is it fair to say: Pain Point (problem) ~ Identifying a Market Gap (opportunity) ~ Expanding an Existing Market (variety of offering)? Or, if there is no real problem that your idea caters to (accessories and alcohol may not always qualify as problem areas), then perhaps see if there is an opportunity by differentiation either through the product itself or in the way you position it? Will that lower my funding probability? So does data suggest Chumbak (variety) may have had a lower valuation than Happily Unmarried (pain point / problem solver)? Or Taco Bell (variety) versus Mc Donalds (fast food pain point / problem solver)? Not expecting real answers, but just food for thought. Thanks for your inputs.
The valuation would eventually depend on multiple other factors too, right? The core team, the scaling plan and critical mass an idea can gather, the advertising, marketing, distribution strategies that will position a product right with the target consumers etc. hence tough to comment on particular brands without knowing all their strategies. But great to have this conversation. Thanks for the thoughts!
If the business idea is a me-too then other factors mentioned earlier will gain more weightage – because idea-wise it isn’t anything unique. So ceteris paribus cannot exist when comparing a me-too offering with existing offerings otherwise what will the funding be based on?
Dear Author,
Reference to Point # 3. Why do I need to solve a problem or address a pain point? There could just be a new opportunity or platform that makes business sense. What problem did Taco Bell solve? It just found a space for itself in the QSR format with a unique offering. Similarly, did Bira Beer solve any problem? There were quality global and domestic beer brands available in India, priced similarly, offering similar taste and kick. Bira got away with great branding and positioning while largely being a ‘me-too’ product. What about Chumbak? Just quirky accessories to create a space for itself or expanding the accessory market with some design innovation.
Would you rather combine Points # 3, 4, 5 and term it as Market Offering / Gap Identification?
Thanks
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Dear Kartik,
Thank you for your keen observations. A business that solves a pain point (or an assumed pain point) surely finds customers as well as investors more easily than one that is offering a me-too product. If you DO choose to be a me-too player, ensure there is value plus in your offering as opposed to players already in the market. A Taco Bell in India saw the need (this could qualify as pain point) for good quality, authentic (debatable to me if TB fits this!), tasty, consistent branded Mexican food. In an aspirational India, where the rising middle class is looking for new culinary experiences, the QSR format was affordable and since there weren’t many others offering this cuisine at these prices, this became Taco Bell’s USP. Bira might have established itself with great branding but it sold its Lite version as being low on calories (a pain point perhaps? Hence trying to attract people – especially women – afraid of the beer belly) because it did foresee people asking – what’s different about Bira? It launched its strong version to challenge larger commercial entities (me-too) because Bira believes there’s enough market for more players.
As for Chumbak, its USP is its design. The pain point is not just accessories – the pain point is lack of QUIRKY accessories in the market (young, vibrant, fun, unique stuff that millennials want) except those provided by one or two brands like Happily Unmarried, The Wishing Chair etc.
I continue to believe that a business that has clarity on the pain point it is solving (a need gap in other words), a solution for this pain point and a USP that makes it different from other available solutions has better chances of grabbing investor eyeballs and will be more welcome in the market than just another me-too.
The me-toos that I think do succeed are ones that are able to see mass demand – you could always offer good quality beer or food to a billion plus nation (even without any USP) and if the quality is half decent, you are bound to win simply by sheer numbers and pricing! In this case, you can surely combine points #3,4,5!! But would you rather not stand out?
LikeLike
So is it fair to say: Pain Point (problem) ~ Identifying a Market Gap (opportunity) ~ Expanding an Existing Market (variety of offering)? Or, if there is no real problem that your idea caters to (accessories and alcohol may not always qualify as problem areas), then perhaps see if there is an opportunity by differentiation either through the product itself or in the way you position it? Will that lower my funding probability? So does data suggest Chumbak (variety) may have had a lower valuation than Happily Unmarried (pain point / problem solver)? Or Taco Bell (variety) versus Mc Donalds (fast food pain point / problem solver)? Not expecting real answers, but just food for thought. Thanks for your inputs.
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The valuation would eventually depend on multiple other factors too, right? The core team, the scaling plan and critical mass an idea can gather, the advertising, marketing, distribution strategies that will position a product right with the target consumers etc. hence tough to comment on particular brands without knowing all their strategies. But great to have this conversation. Thanks for the thoughts!
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Sure, but the thought was ceteris paribus. Cheers
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If the business idea is a me-too then other factors mentioned earlier will gain more weightage – because idea-wise it isn’t anything unique. So ceteris paribus cannot exist when comparing a me-too offering with existing offerings otherwise what will the funding be based on?
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Thanks for providing great tips. Nice and very helpful information .
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