Chipmunks, Roads and New Markets

As I swerved to avoid the chipmunk crossing the road, I felt the unmistakable soft thump as he went off to meet his maker. I felt bad about this as these cute creatures are relatively benign and fun to watch. He just picked an inopportune time to seek out the spoils on the other side. A similar fate sometimes befalls companies that urgently try to get to new markets. Though a tried and true growth strategy with new or current products, it is usually more challenging than initially thought.

There are two general ways to get to the greener pastures – the first is to spend the time and energy($) to determine exactly where your product will be well-received and then figure out precisely how to get there. The second is a more empirical path where you have reasonable confidence that you will be successful, but release the product with the expectation of garnering valuable feedback which you will then use to make the final (wildly successful) product. Which of these avenues you choose stems, to a large degree, from the capabilities and nature of your organization.

• If you tend to be risk averse (be honest here), then by all means do a lot of due diligence before you push the go button. However, if you can live with some uncertainty and occasional failure, then the two-step process may be for you.

• Having the ability to rapidly turn around product enhancements is also critical to empirical marketing. If it takes you 9 months to update a manual, then stick with the heavy up-front strategy development.

• Finally can the business tolerate a shaky forecast? If you are hanging your overall success on this product meeting your initial forecast, then certainly the conservative approach is best. If you have great cash flow and having a low forecast or missing it is tolerable, then go ahead and do the launch and learn.

Finally no matter whether you have complete confidence in this product or are just testing the waters, good execution is paramount. Having a good plan and doing it well are often the most important determinants of success (or failure). For it is likely that the little chipmunk had a well-conceived plan for building a new home in the roots of the old maple, he just executed poorly and chose the wrong time to cross the road.