It is back to business Monday and we have an episode coming up with MakerBots Drew Lentz that made us think of this topic for today where he mentions that there’s a huge market needs gap between the education market in 3D printing of where the teachers are getting information today and where the information lies in the 3D print community. I would say it’s more like a gulf or a cavern instead of a gap, but it’s a really good point.
Listen to the podcast here:
3D Print Market Needs Gap Identification
Finding a market needs gap like that is a huge business opportunity that doesn’t come around that often, nor do they get realized that often. That’s because most people, entrepreneurs, or businesses model after something that is already successful. The gap is a scary place – is it really a need? Is it a gap for a reason, that nobody wants it? The return on investment is the highest when you have a gap like that. If there is no one else in the field, or it’s this open lane where no one is there and you can run down it as fast as you can, you’ve got a market all to yourself.
We look for those gaps in product development all the time in those market niche areas. Let’s say someone hires us to go in and find the gap in pet bedding, they want to find out if there is something new they can do in that area. On a minute level there always is, there might be a gap in what materials people want, or the size that is being made out in the market, or a gap in the color. Those are minor gaps and very minute ones, but that is how we analyze it. You have to analyze a market as a whole, analyze the demographic of that market, and then you match the two together.
If the trend is for there to be smaller dogs, such as the case in this example, but the pet bedding was all over sized – you have a gap in the market. Most people would be thinking, well I don’t know if there is a market for that, so that’s where you have to go in and do further analysis, and that’s where we go in and do market-proof testing. It’s very easy for us to say, “Let’s make some smaller ones and do a test run and see if they sell out.” In certain industries it’s easy to do it that way. You can do that online, you can throw it up on Amazon and see what happens with it (of course you have to work on ranking it, so maybe I shouldn’t say it’s easy do that on Amazon).
There is a lot involved in marketing on Amazon besides the need for a product out there. It has a lot to do with keywords and all sorts of things that have nothing to do with your brand or how your product is. If you already have a brand and have a good channel, definitely try testing out a product and see if that product within the category will fly. It’s a really important opportunity to identify.
There are really easy ways to identify whether or not if these gaps are really gaps in the market, and that’s by actually rating something. It’s like my 101 with our clients, I ask them if they read their comments from customers. It can be an untapped volume of information for some companies. They will wonder why the sales on a product they have been selling forever are down and they don’t understand why, even if there are no major competitors in the market. I’ll simply google the product and discover there was some quality problem, or the number one thing I see is that the colors have become outdated and ugly. They forget you have to keep up with fashion and colors to some extent.
If you mine those comments there is usually a treasure trove of information. You still have to mine those comments smartly because sometimes those comments are bought. I know you are probably and educated consumer and smart enough to know the difference between them, but others might not know that sometimes people get free review units and their job is to give five star reviews to things. It’s not supposed to happen, but everybody knows that it does.
NOTE & USEFUL LINK FROM LISTENER JOHN HAWTHORNE:
“…in an effort to boost sales, some Amazon sellers will either purchase reviews or offer free products in exchange for an “honest” review. As you can imagine, this deeply skews the rating system on Amazon. Fortunately for you, Amazon is beginning to take steps to crack down on and even remove fake reviews. But until all those fake reviews are gone, you need to know how to spot a fake. Here are 10 ways to spot a false review on Amazon.”
Even at a buyer level, they don’t want to fail, so they choose the best market to be putting products in so that if it flies, it flies. If it fails, well it well sell out slowly but it will still sell out so they aren’t stuck with it. You can’t really trust that all of the reviews are good, but if you got hundreds and hundreds of them you can tell. If you go through them, you can genuinely tell the ones that are fake, they usually just seem a little too neat and tidy. Maybe they are legitimate, but I think you have to take it with a grain of salt. When you see one where they go into a terrible amount of detail, it’s probably genuine. Especially with pet product reviews, people love their pet and will go to great lengths to describe how the pet liked it.
With the example of the pet bedding, you can also do things like find a community that already has small pets or all small dogs, even breed specific. You can ask them if they have had trouble finding pet bedding. They will answer you because if something good could come out of it, they will let you know. These are easy ways for you to go find out that information of a market needs gap.
One more tip I want to give about reading the comments is, is that I always check the city of who the manufacturer or distributor is. I will disregard any comments that come from the same city. It could be that they are from employees of that company or from people who are friends or family of someone at the company. It happens. Unless they are really great comments with really great detail, I will usually disregard and ignore those comments. It’s probably easier to figure out if the company is more rurally located, not much you can do about a company from Los Angeles or New York but other rural areas, yes.
I’m reminded of when we were developing our mesh chair for Costco for our client, that market was nowhere in the neighborhood of mesh chairs. It was a gap that we identified, but everyone was afraid of it. They had only ever sold these leather upholstered office chairs for all these years, and it took a long time to convince them. We did do a test market and it took us about eighteen months from first presenting it to them to getting it to the market because they were so hesitant. Every time we pushed them and got them to do a test, it proved right, that analysis was there. It sold in half the time that they gave it to sell. It does take a leap of faith and vision to bridge that market gap, it’s not an easy thing.
There are also businesses that develop out of a gap, like Victor Ciccareli from STEAM Maker Workshop down in San Diego, his whole business happened because there was a gap and he filled it even though that wasn’t how he intended to start his business. That’s why the strength of a business that develops out of a gap like that usually develops a bigger base and is stronger. The thing is though, is that a bigger business can recognize that you have filled a gap and will come in and stomp you out. They might use their marketing power to model after you and come in and eat your lunch.
The reality is that it happens, but, to me, that’s not a reason to be fearful and not go into the market needs gap and fill it. If you’ve got it and you are doing it well, you are the innovator and they are followers, so you have opportunity to find out what the market really wants and you will always stay ahead of them. As someone who’s in product development, I’ve always been comfortable with the future and the unknown, it’s never really concerned me, so in our business I don’t really want to do things that are “me too.” That I’m doing it just because I can and that there’s a big market for it and there’s a model, so then it’s like there’s a place for everyone to take a piece of that pie. I want to do things that are “me only” or at least “me special,” you’ve got to have a unique twist on it. I think we do that in our designs.
In the 3D printing market, I think it would be interesting to take a lot at a lot of the companies that are out there and to identify some that found this open field, where they identified a market needs gap, and went into it. I think that’s where the staying power for someone is right now, that if you are filling a need, solving a problem in the 3D print market – rather than making another filament or 3D printer – but actually solving a problem and filling a gap, you have a better shot at it.
We have another interview coming up in the next couple of weeks where people were concerned about a potential threat, and then that treat happened. It ended up not being a detriment to their business, it ended up being one of their biggest successes. It’s especially hard in a new market. Even though 3D printing has been around for a couple of decades, the desktop printing market is very new. A lot of the consumer angles and aspects are so new, there’s not a lot of modeling that can be done. You have to be identifying the need gap to succeed.
You can go micro or you can go macro, it can be a huge business choice or it can be just a simple product line choice. You’ve made a particular choice to make something new that is serving a particular customer, there’s a gap and a niche to start to build consumer brand loyalty.
- Market proof testing
- Victor Ciccarelli from STEAM Maker San Diego
- A Suprisingly Large Amount of Amazon Reviews are Fake
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