Market segmentation is the process of exploring the world of potential market opportunities before blindly diving into deep waters. It’s about taking a step back to the full view of every possible market (brainstorming), reflecting on which ones inspire and attract you the most (narrowing), and conducting rigorous research to understand which one is indeed the single best market for you to focus on and develop your innovation (The Segmenting Stage).

Brainstorming

This stage is about exploring the world of possible end users and broadening it as much as possible to consider who might benefit from your idea.

Even though wild ideas are highly recommended at this point, this stage should be effectively conducted in order to properly consider all possibilities in an unbiased way. Be sure to keep the following tips in mind:

• Maintain FOCUS on potential end-users only!
• One conversation at a time.
• Encourage wild ideas and defer from judgment.
• You may only build on ideas; never critique, combine or reject any idea! To ensure this, start off your response to any idea with “Yes, and”.
• Yes, it is helpful to find an inspiring place for an open and constructive debate with various experts, founders and potential partners, but do not expect this to be it. Brainstorming is a stage, not a session. You should hit the streets and go on social media to test it out with real-life potential customers. Brainstorming will never be done, but you should only move onto the next stage – narrowing – once you have the best portfolio of options you possibly can.

Narrowing

This stage is about all market segments that are not a strong option. The goal is to get to a manageable list (4-10) market segment possibilities that you can conduct a deeper analysis on before moving on to select your beachhead market.

To begin this process, you should focus on your team’s values, passions, and goals, and eliminate ideas that violate your values or that would tie you up to doing something that you are not passionate about. Once the obvious market segments are excluded, vote on the remaining list of market segments to get to a prioritized list.

Segmenting

This stage is about getting unbiased market feedback through observations, interviews, and experiments – the most crucial stage for your success. Be sure that everyone involved is at 100% with the previous unit on Primary Market Research!

The best way to tackle this stage is to assign each market segment to a subgroup within the team. There should always be more than one person working on the same market segment to guarantee that the resulting analysis benefits from multiple perspectives. Next, you should define a deadline for delivering a detailed analysis resulting from the interview/observation from a minimum of 10 potential end users, from each market segment. At the date of this deadline, the team should meet and discuss their findings. Some market segments may now be eliminated, many questions and points will be raised about others, leading to the need to conduct a second, third, and fourth round of primary market research until the team arrives at a consensus of complete knowledge on the best viable market segment options – the moment of “speak now or forever hold your peace”.

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