In November 2010 I was invited to speak on a panel at the MIT Enterprise Forum - Software Special Interest Group, on the topic of new market versus new product. The other panelists were Ken Rugg, formerly SVP at Progress Software, and Kathryn Roy, Managing Partner of Precision Thinking. I was a UMass Amherst grad with no MBA, two small wins, and a couple of real losses. I went first.

What I talked about was PermissionTV - a case study in what happens when you take a new product into a new market simultaneously. I do not recommend it.

New product into a new market: PermissionTV

PermissionTV was an online video platform for premium publishers - a new product category at a time when online video was still figuring itself out. We were not selling into an existing market with an established category. We were trying to create the category and sell into it at the same time.

The problem with this approach is that it doubles your sales cycle. You have to educate the buyer about the category before you can make the case for your product within it. Every sales conversation starts from scratch. There is no shorthand. Clients like Fox and MGM understood what they wanted eventually. Getting them there took time the company did not have.

PermissionTV eventually rebranded to VisibleGains and wound down. The product was real and the problem was real. The go-to-market approach of trying to create a category while also building a customer base was too slow for the capital constraints of an early-stage company.

The cleaner path: new product into an existing market

The lesson I took from that experience, and from watching EditMe find its footing, is that an existing market with unsatisfied demand is a much better starting position than a new market where you have to create the demand from scratch. At EditMe, online wikis were a category that existed. Buyers understood what they were. The question was which product in the category served specific segments best. That is a sales conversation you can have quickly.

My answer to the MIT audience that night: be very honest about whether the market you think is new actually has latent demand you can access, or whether you are going to have to create the demand. Creating demand is expensive and slow. Most early-stage companies cannot afford it.

If you are entering a new market, find the buyers who already know they have the problem you are solving. If you cannot find them, you may not have a market yet - you may have an idea that needs more validation before it becomes a product.
The most expensive mistake in go-to-market is trying to create a category and sell into it simultaneously. Pick one. Create the category or sell into an existing one. Not both at once.

If you are working through a go-to-market decision and want to pressure-test it, book a call.