The pandemic has upended the business models of most startups and existing companies. As the economy reopens, companies are finding that customers may have disappeared or that their spending behavior has changed. Suppliers are going out of business or requiring cash-up-front terms. Accounts receivables are stretching way out. Revenue models and forecasts are no longer valid.
In sum, whatever business model you had at the beginning of the year may be obsolete.
While there’s agreement that companies need to adapt to changing markets and rapidly find new markets, new customers, and new revenue models, the question is how? What tools and methods can a C-suite team use to do so?
While lean startups are built with Business Model Canvas, Customer Development, and Agile Engineering, there’s an additional tool — the Market Opportunity Navigator — that can help entrepreneurs discover new opportunities.
Here’s how.
Capture opportunities by repurposing your startup’s abilities
When COVID-19 first emerged, established companies rapidly pivoted. Some focused on remote work, others offered new ways to learn online. Swiss smart flooring startup Technis now helps supermarkets regulate the flow of shoppers. Large companies like GM, Ford, and Rolls-Royce began to produce ventilators. Companies in cosmetics and perfume production pivoted their production lines as well. With ethanol and glycerin on hand and equipment required to fill bottles, French luxury giant LVMH has started to produce sanitizer – just like gin and whiskey distilleries across the US and UK have done.
Although the large firms made the headlines, startups also pivoted. For instance, Italian additive manufacturing startup Isinnova used its 3D-printing equipment to produce a crucial valve for oxygen masks. New York-based startup Katena Oncology discovered that a cancer detection tool under development could be adapted to test for coronavirus.
In these examples CEOs instinctually figured out 1) their core, and 2) market needs where their competencies/abilities could be used.
Rather than running on instinct, the Market Opportunity Navigator can help CEOs figure out their next moves in this confusing recovery. It can provide a big-picture perspective to find different potential markets for your company’s competencies/abilities. This is the first step before you zoom in and design the business model, engage in focused customer development or, test your minimal viable products.
Take the example of Abionic, a nanotech startup.
Abionic: pivoting a sepsis test to fight COVID-19
Abionic’s tests can detect allergies, cardiovascular diseases, sepsis, and other diseases in five minutes. As the pandemic hit, the company’s leaders wondered how their tests could be used in the fight against COVID-19. Using the Market Opportunity Navigator, Abionic realized their test could diagnose sepsis up to 72 hours before a septic shock would occur in COVID-19 patients.
One of the worksheets below from the Market Opportunity Navigator provides a systematic view of Abionic’s market discovery process: The upper part of the worksheet shows Abionic’s technological assets, and the lower part shows how these abilities can be used different market opportunities.
By looking at their technological abilities, especially in the early detection of sepsis, and clinical data showing that septic shock is one of the key complications of a coronavirus infection, Abionic identified a new market opportunity to help patients suffering from COVID-19. Their CEO Nicolas Durand explains: “If doctors are able to diagnose sepsis up to 72 hours before a septic shock would occur in COVID-19 patients, they can prescribe an antibiotic therapy much earlier, thereby potentially saving the lives of millions. In order to test this application of our technology, we deployed our machines at the Hospital at the University of Geneva and see promising results!”
Discovering new opportunities with the Market Opportunity Navigator
Abionic and other companies were able to act fast, as they already possessed technological abilities that, with limited adjustments, could be pivoted or repurposed to the newly identified COVID-19 opportunities.
Yet, because the crisis and recovery will create a “new normal,” additional opportunities will emerge that wait to be discovered by startups and existing companies. Think about looking beyond the immediate opportunities of existing customers and markets, and take a mid- to long-term view on how you can proactively identify new and emerging market opportunities. The three worksheets of the Market Opportunity Navigator help you to:
- Identify new market opportunities stemming from your technology or abilities
- Reveal the most attractive domain(s) by evaluating the potential and challenges of each option
- Prioritize market opportunities smartly to set the boundaries for your lean experimentations.
Lessons learned
The COVID-19 crisis and recovery creates fundamental shifts in our economies and societies, and a “new normal” is emerging. Winners in this new normal will be able to quickly understand
- what are their company’s core competencies/abilities, and
- the new market needs where their competencies/abilities could be used
The Market Opportunity Navigator is a framework for this identification process.
You can download the Market Opportunity Navigator and its free worksheets here.
Steve Blank is a retired serial entrepreneur-turned-educator who created the Customer Development methodology that launched the lean startup movement, which he wrote about in his book, The Four Steps to the Epiphany. Blank teaches Lean LaunchPad classes at Stanford University and Columbia University where he is a senior fellow for entrepreneurship.