The Key To Finding a Profitable Market

Summary

In this insightful video, the speaker addresses the common query of identifying a viable market for business. Emphasizing the importance of a growing market, the speaker suggests targeting a segment where one can provide the most value, particularly if there's personal experience. They outline a four-point checklist: market pain, growth, ease of finding prospects, and purchasing power. Using relatable examples, they stress the necessity of all four factors for a successful market entry, advocating for strategic market selection to ensure business prosperity.

Takeaways

• 📈 The first rule of thumb for choosing a market is to ensure it's not dying but either stable or growing and to assess where you can provide the most value based on your skillset.
• 🏆 If you have personal experience or inherent advantages in a specific market, it's recommended to target that market first due to your deep understanding of its needs and challenges.
• 🤔 For those without market experience, consider four key factors: market pain, growth, ease of finding the market, and purchasing power.
• 🚨 Market pain is crucial; your product or service should address a desperate need rather than just being a 'nice to have'.
• 🌱 Timeless needs such as health, wealth, and relationships are often areas where there is consistent market pain and opportunity.
• 📊 Growth is essential; a shrinking market like the newspaper industry can lead to business decline regardless of current demand.
• 🔍 The ease of finding your target market is vital for effective marketing; if you can't reach them, they can't become customers.
• 💰 Assess the purchasing power of your target market; even if there's pain and growth, if they can't afford your product, it won't sell.
• 👵 An example of applying the framework is targeting seniors for a relationship coaching service, as they have pain, are growing, easy to find, and have purchasing power.
• 📝 The importance of having all four criteria met in a market; having just three can lead to failure, as illustrated by the newspaper and unemployment examples.
• 💼 When investing in companies, the founder's experience in the market and the alignment of the problem with the four criteria are critical for identifying good opportunities.

Q & A

What is the main topic of the video script?

The main topic of the video script is about identifying a good market to target based on certain criteria and considerations.

What is the first rule of thumb mentioned for evaluating a market?

The first rule of thumb is to ensure the market is not dying and is either stable or growing.

Why is it important to provide the most value to a market you have experience with?

It is important because you understand the market's pains and needs better, allowing you to create a product or service that provides more value and resonates with the target audience.

What are the four criteria the speaker suggests looking for in a market?

The four criteria are: 1) The market is in pain and needs the product or service, 2) The market is growing, 3) The market is easy to find, and 4) The market has purchasing power.

Why is it not enough for a market to just be in pain or just have purchasing power?

It is not enough because a successful market also needs to be growing and easy to find to ensure that the product or service can reach the right audience and sustain growth.

Can you give an example of a market that is in pain but not growing?

An example given is the newspaper industry, where despite the need for news, the market is shrinking due to the digital shift.

What is the importance of a market being easy to find for marketing purposes?

It is important because if you cannot effectively target and reach your market, your marketing efforts will be ineffective, and you won't be able to present your product or service to potential customers.

Why did the speaker's friend fail to sell to unemployed people despite identifying a need?

The friend failed because although the unemployed people were in pain and easy to find, they lacked the purchasing power to buy the coaching service.

What is the example given for a market that has all four criteria?

The example given is targeting senior citizens for a relationship coaching service, as they are in pain from loneliness, the market is growing due to aging, they are easy to find, and they generally have purchasing power.

How does the speaker evaluate investment opportunities in companies?

The speaker evaluates investment opportunities by looking at the founder's experience in the market and whether the problem the company is solving matches the four criteria for a successful market.

What is the final advice the speaker gives for choosing a market?

The final advice is to choose a market where you can provide the most value, especially if you have personal experience, and ensure that the market meets all four criteria for success.

Outlines

00:00

🤔 Evaluating Market Potential

The speaker discusses the importance of identifying a good market for a business. They emphasize that the market should not be dying but rather stable or growing. The first rule of thumb is to determine which market one can provide the most value to, based on their skills and personal experience. If no personal experience is available, the speaker suggests looking for a market in pain, meaning there is a desperate need for the product or service. The speaker also highlights the importance of the market being growing, easy to find, and having purchasing power. They use examples such as a newspaper company and a friend's experience with unemployment to illustrate these points.

05:02

💡 Choosing the Right Market: A Four-Step Checklist

Continuing from the previous paragraph, the speaker outlines a four-step checklist for choosing the right market. The first step is identifying if the market is in pain, which means there is a strong need for the product or service. The second step is checking if the market is growing, using the example of a friend who transitioned from newspapers to masks. The third step is determining if the market is easy to find, which is crucial for effective marketing. The fourth and final step is assessing the market's purchasing power. The speaker uses the example of a relationship coach to illustrate how these criteria can be applied to choose a market that meets all four criteria, leading to a higher chance of success.

Keywords

💡Market

A market refers to a group of potential customers who share a common need or want for certain goods or services. In the video, the speaker emphasizes the importance of identifying a market that is not dying but either stable or growing. The theme revolves around choosing a market that is experiencing pain, has growth potential, is easy to find, and possesses purchasing power.

💡Value

Value in this context is the worth or usefulness that a product or service provides to a customer. The speaker suggests that one should target a market where they can provide the most value, especially if they have personal experience or inherent advantages in that market, which allows for a deeper understanding of the customers' needs.

💡Pain

Pain in the script represents a problem or a need that a customer is experiencing and is seeking a solution for. The speaker mentions that a market in pain, meaning one with a desperate need for a product or service, is more likely to make a purchase, especially in difficult economic times.

💡Growth

Growth in the video refers to the expansion or increase in size or numbers of a market. The speaker uses the example of a newspaper company to illustrate that being in a growing market is crucial for business success, as opposed to a shrinking market which can lead to business decline.

💡Targeting

Targeting is the process of directing marketing efforts towards a specific group of potential customers. The speaker highlights the importance of being able to easily find and target a market, suggesting that if a market is difficult to locate, it will be challenging to market to them effectively.

💡Purchasing Power

Purchasing power is the ability of a consumer to purchase goods and services. The speaker warns against targeting markets, such as unemployed people, that may lack the financial means to buy products or services, even if they are in pain and the market is growing.

💡Timeless Needs

Timeless needs are fundamental human requirements that persist over time, such as health, wealth, and relationships. The speaker uses these as examples of areas where there is always a market need, suggesting that addressing these needs can provide a stable foundation for a business.

💡Economic Condition

Economic condition refers to the state of the economy, which can influence consumer behavior and purchasing decisions. The speaker notes that in a bad economic condition, people are less likely to spend money on non-essential items, emphasizing the importance of targeting markets with a desperate need.

💡Personal Experience

Personal experience is the speaker's own background or expertise in a particular field. The speaker recommends choosing a market where one has personal experience because it allows for a deeper understanding of the market's pain points and the creation of a better product or service.

💡Investment

Investment in the video script pertains to the act of committing resources, such as time or money, into a business or market with the expectation of a return. The speaker discusses using the four criteria (pain, growth, findability, and purchasing power) as a framework for evaluating potential investments in companies.

💡Framework

A framework is a set of criteria or guidelines used to evaluate or organize something. The speaker presents a four-point framework to assess a market's suitability for business, which includes checking for pain, growth, ease of finding the market, and the market's purchasing power.

Highlights

The speaker discusses how to determine if a market is good to pursue.

The first rule of thumb is to ensure the market is not dying and is either normal or growing.

The speaker advises focusing on the market where you can provide the most value, especially if you have personal experience or inherent advantages.

For those without market experience, four key factors to consider are outlined: market in pain, market growth, ease of finding prospects, and purchasing power.

Markets in pain are those with a desperate need for your product or service, unlike 'nice to have' items.

Timeless needs like health, wealth, and relationships are often areas of pain for consumers.

The speaker uses the example of a newspaper company to illustrate the importance of being in a growing market.

Ease of finding prospects is crucial for effective marketing and targeting.

Markets with associations, groups, and channels are easier to target and reach.

Purchasing power is essential; a market must have the financial means to buy your product or service.

An example is given where targeting unemployed people for resume coaching failed due to lack of purchasing power.

The speaker recommends using a framework to evaluate markets based on the four factors: pain, growth, findability, and purchasing power.

Choosing a market you know well and can provide value to is crucial for success.

The speaker shares an example of a relationship coach focusing on seniors, a market with pain, growth, findability, and purchasing power.

Having all four factors is essential; having only three can lead to failure, as illustrated by the newspaper and unemployment examples.

The speaker concludes by emphasizing the importance of matching the founder's experience with the market and the problem being solved.

Transcripts

what's going on everyone what i want to

talk to you about today is a question

that i get all the time which is how do

i know i have a good market right which

is what are the things i should be

looking for to know i have a market that

i should go after and the first thing i

want to address here is you know i had

this conversation yesterday and

someone's like hey i'm between uh you

know uh you know dentists and hearing

aid specialists and pharmacists right

for what market i wanna go after and

serve right and i was like okay cool

well what are the considerations right

and they didn't know how to actually

analyze each of those businesses and so

the first rule of thumb that i'll give

anyone

is as long as the market is not dying

and is either normal or growing then

which of the markets can you provide the

most value to

all right so most value

and that's given your skill set so if

you have an advantage inherently or you

have experience

working with people in a specific

marketplace or especially if it's

personal experience then i would usually

recommend going after that market first

because you know their pains you know

what it feels like you will empathize

with them and you ultimately create a

better product that will provide more

value to them and you'll be able to win

now that's a great scenario but many

people i talk to have basically no

experience in any market and i'm like

okay well then these are the four things

that i look for all right

so they are as follows

the first thing that i'm going to look

for is is the market in pain all right

so do they have a desperate need

for my product or services right a nice

to have is not something people are

going to take their money out and buy

especially in a bad economic condition

right if we're in a good economic time

when you're watching this and that's

awesome and if we're in a bad one then

you'll know right so the first thing i'm

looking for is do they have a desperate

need are they starving for the thing

that i'm looking for right there are

some things that are timeless right

health wealth and relationships are the

timeless needs of humanity right uh you

know are they are they sad and lonely

that's relationships uh are they broke

that's always pain and uh

health are they are do they feel bad

about how they look and are they

unhealthy right and so there's the three

big ones right but is there key pain

that i'm solving

the second

is is the market growing right

so i'll give you an example of this uh i

think i've told the the story of my

buddy who owned the newspaper company uh

he could not figure out why his company

was not growing um and he called me up

and i was like dude like you're much

smarter than i am uh it's probably

because you're selling the newspapers he

was like no no it can't be that and i

was like no i think it's that and as

soon as he switched from selling

newspapers to selling masks

in manufacturing he went from a few

million dollars a year to a few million

dollars a week

all right same entrepreneur simply

applied it to a growing marketplace all

right the uh the next thing that i'm

looking for in terms of marketplace

is

are they easy to find

all right and this is important

because if you're marketing

and you can't find your prospects if i'm

marketing to plastic surgeons for

example and the only people seeing my

ads are nurses then i'm not going to be

able to get my my my product my service

in front of them or even get my offer to

them if they're impossible to find and

so whenever i'm picking a market i'm

going to try and find one that i can

easily target

that has associations they have groups

they have channels they all watch

they're all congregated in one place and

so that way i can cast my fishing line

there and then i can hook the clients

that can take a step towards me because

if you can't find them they'll never

find you right and so one they have to

be in pain two they have to be growing

three they have to be easy to find all

right now the fourth one is purchasing

power all right which is do they have

the monies right now a quick example of

this is i had a friend of mine who was

looking at this and he was like dude

i've got the perfect market i'm going

after unemployed people and i want to

coach them on how to do their resumes

right

tons of pain on not having a job he said

it's definitely growing because people

are coming in and out of the market so

there's tons of people that are coming

in outside my ads won't get fatigued and

i was like okay he's like they're super

easy to find and i was like that's great

but then

he's like no one wants to buy my stuff

because they all say they don't they

don't have jobs

and so he wasn't able to have the

purchasing power

from this target right and so let me

give you an example of of of two

different ways that you could use this

framework right so let's say if i were a

relationship coach i was somebody who

serves uh couples i'm good at helping

people find love right

well i'm gonna look for a market that

has all four of these things which means

instead of saying i'm gonna help you

know college kids

right

for me my service business find love

all right instead of having that's a

heart uh college kids find love what i

would probably do is instead

go after

seniors right in maybe their second half

of life to find their next partner

that would probably be where i would

focusing and what happens there is

seniors have tons of pain because

they're alone it's growing because

people die and get older every day right

they're easy to find

and i know that senior citizens in

general have far more money than college

kids though right and so even though i

have the same core value proposition i'm

choosing to serve a better market that i

will ultimately probably make more money

with all right and so this is kind of

the process that i look at is number one

above all else which market can i

provide the most value to if i have

personal experience that's going to

trump everything now if i don't have

personal experience and i just have a

skill of being able to market or sell or

whatever then i'm going to look at my

market in these in in this four

four piece

system whatever you want to say

checklist

and the thing is is you can't just have

three of them right uh in the in the

newspaper example they were in tons of

pain they were easy to find and they had

purchasing power the problem is they

weren't growing they were shrinking

every year right

uh the the the unemployment example

they were growing they were in pain but

they didn't have the purchasing power so

that's the that's the problem there uh

the nurses and plastic surgeons example

that would be one or if i can't find

them then i can't display the ads to

them and then obviously if people don't

watch your product at all and it's just

a nice to have then they will not buy it

all right and so you want to make sure

that you do not have one two three of

these you want to have all four in any

market you pick and ideally pick a

market that you already know you can

provide value to and solve a problem

that meets these four criteria and

you'll have the recipe for success so i

hope that made sense that's how i look

at markets that's what i look at when

i'm trying to invest in companies

i look at the founder i see if they

already have experience in this and then

i see if the problem that we're solving

matches these things and then at that

point i say you know what i think this

is a good opportunity let's do it

hope you enjoyed that and uh see you the

next video

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