Monday, November 16, 2009

Principle of Innovation: Don't lose 'focus' off your market segment

Sir Mannan could not over-emphasize this principle while explaining a step in the process of innovation to our now ex-senior students of business sciences. The principle is simple, in words of Naeem Zafar*: "The problem is indigestion, not starvation, my friend--too many ideas and not enough focus." In sir Mannan's terms: Start with a (small) single market segment to test your newly-born product.

Like what Facebook's founders did. "[W]hen Facebook started, the company's founders could have covered the entire internet user market, but they started by aiming at college campuses. In fact, they focused at first on a single campus: Harvard University!" Professor Naeem continues to advice, "Once you have worked out the kinks in your first deployment, you can cover the market more broadly. The same principle applies when it comes to product features and marketing campaigns: be precise and methodical. This is where good research can help you pick the best market segment. Remember: market research is key to succeeding as an entrepreneur."

Nowhere this principle may better be demonstrated than in our professor's own video-presentation, which is still being shown to all Standford entrepreneurship school graduates.

* Naeem Zafar is the faculty member of University of Berkeley Haas Business School.