#8 — Identify Target Market & Marketing Strategy
Next on the list of “10 Signs of a Fundable Company” is 2-part: 1) Identify a target market, and 2) have a strong plan to penetrate that market.
Too often, entrepreneurs make a mistake by saying, “We are entering a $8 Billion market and all we have to do is get 0.1% of the market to make $8 Million in revenue!” There are 2 problems with this statement: 1) They are not referring to the Total Addressable Market and 2) they are taking a top-down approach to market penetration (which is very unrealistic).
Total Addressable Market: the precise market and customers that will purchase the product (not the entire market).
Once you have identified a market, the more important piece of the puzzle is to have a plan to penetrate that market. If you don’t have a solid market penetration strategy, you’ll have a hard time raising capital.
TIP: instead of selling customers one at a time, think about various channels or partners that already have relationships with many of your customers and sell through them. Investors love to see such a plan because you can penetrate the market much faster.
