This document discusses product-market fit and target market selection. It defines product-market fit as having a product that satisfies a specific market need. To have product-market fit, a company must understand the industry, target market through detailed customer analysis, and competitive landscape. Key aspects for understanding the target market involve analyzing market size, customer segments and demographics, behaviors, and location. Competitive analysis requires understanding direct and indirect competitors as well as barriers to entry for a given market. The document emphasizes the importance of having a product that solves customer needs to achieve product-market fit and business success.

1. Product-Market Fit & Target Market
Selection
Hong Kong, July 19, 2019
European Innovation Academy Matthias Hendrichs

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 23+ years of professional experience, last 13 years in Asia
 Senior Executive at Apple
 Partner at strategy consulting firms (Booz&Co, Gao Feng)
 Founder and brain-father of US$1.5B-valued digital travel
business from 2009-2012
 Founder of a user experience & usability firm from 1996-2001
Mix of Tech, Start-Ups, Consulting

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Intraflux in 1996 & askTingTing in 2009
 World's first interactive and mobile
guide on rental phone
 Free local and international calls
 HD videos of Hong Kong with 100s of
recommendations
 Network of hotel,
airline & retail partners
 Sold in 2012 to Tink
Labs now called
“Handy” (current
value $1.5B)
 Usability and User-Interface design
company
 Use Psychology to make the
Intranet easier to use
 Clients: Roland Berger consulting
firm, Vodafone, etc.
 Team of 25 people team with
diverse background

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What is Product Market Fit?
WRONG!!!!

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Common Questions from Investors:
1. Does your product solve a real need?
2. How big is your market?
3. Who is your competition?
4. How difficult is it to enter your market?

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Only if your product addresses a specific market
need, you’ll be successful
PRODUCT MARKET
FIT

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EXAMPLE: askTingTing
PRODUCT MARKET
askTingTing
 People travelling to new destinations
 Keen to explore city in interactive manner
 Stay connected and make phone calls without roaming charges

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In other words:
Marc Andreessen defined the term as
follows: “Product/market fit means
being in a good market with a product
that can satisfy that market.”

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How do you know there is a fit?
Stage 1 (Early Idea):
 What is the reaction when you tell your friends?
 How about industry experts?
Stage 2 (Business Concept):
 Is anyone willing to commit before you actually develop
the product?

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How do you know there is a fit?
Stage 3 (Product is launched):
 What is the reaction from the market/press?
 How many new customers buy your product?
 Do customers recommend your product to friends?
 Do customers care if you stop offering your product?
 How is the ratio of customer growth vs churn?

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What is the market size for your product?

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Example
 TAM: Total UK consumer expenditure on food in 2014 was £198
billion (including catering, alcoholic drinks, non-alcoholic drinks and
other foods)
 SAM: The serviceable available market for alcoholic drinks, which
producers of alcoholic drinks target and serve, is £49 billion
 SOM: Market share of an individual producer. Since the market for
alcoholic drinks is not a monopoly, the share of market for a
company producing alcoholic drinks can never reach 100% of SAM

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Understand your Market
A. Industry Analysis
 Description, Size, Trends, …
B. Target Market Analysis
 All about your Customers (incl Demographics), Size
C. Competitive Analysis
 Competitors, Barriers to Entry, Regulation

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A. Industry Analysis

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A. Industry Analysis
1. Industry description and environment
2. Size ($)
3. Trends
4. Key Players
5. Influencers

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B. Target Market Analysis

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B. Target Market Analysis
1. Size (#)
2. Segments
3. Demographics
4. Behavior
5. Location

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C. Competitive Analysis
1. Competitors
 Direct competition
 Indirect competitors (Alternative solutions)
 How are you different?

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C. Competitive Analysis
2. Barriers of Entry
 Investment
 Technology
 Brand/Marketing
 Regulation
 Access to resources
 Access to distribution channels
 Location

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Most important:
Trust your gut and have fun!!!

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Thanks for your attention!