Markets and Clients
Matching Multiple Markets
Discovering opportunities in undeveloped and underserved markets presents a challenge for any company. Identifying market appetites is a skill that effective hypergrowth companies possess.
In this context, the term “market” has several meanings: consumer and business markets; regulatory environment; supply-side markets, such as talent or service providers; and capital markets for finance and M&A and IPO market. Hypergrowth companies demonstrate a unique skillset to navigate and manage multiple markets and the opportunities offered.
Some firms are even able to address multiple markets through their business models; for example, by matching or aligning consumers or business on both the supply and demand sides, reaching markets that may have divergent growth vectors simultaneously. Ability to capitalize on market opportunities requires agility and scalability.
A key factor for hypergrowth is to address the target audiences as a market and build the offerings for ease of consumption. Interest in an individual client is often limited as partners, user communities and self-tailoring with technology are often employed to acquire and manage individual clients.
One observed characteristic is that many hypergrowth companies have established a simple process for new market entry, such as partnership or single product/service offering. Hypergrowth companies also tend to focus on multiplying existing market opportunities before secondary market entry. In addition, high market penetration in the primary market often acts to increase the demand in secondary markets, building critical mass of demand for the expansion to new markets.
Market entry is often experimental, followed by scaling and diversification if the business takes off as planned. Data is a key driver for segmentation and targeting in new markets and scaling decisions are made based in conjunction with the data.
Markets and Clients, solution examples
Key Growth challenge
3.1 Selecting the right clients
Innovation capabilities in a changing marketplace
Priority change with the client segments: prioritize innovative clients as partners and detach concepts of revenue and value per client from each other
Mobility Industry, South Asia, CEO
“Working with innovative clients has taught our company so much about new business opportunities and helped us transform the business. Old institutional clients do not teach us to be innovative or fix the business even if they bring the cash flow. Our way of innovating, finding new opportunities and solutions transformed us, once we started to work closely with some of our smaller but very innovative clients. Ever since, we have changed our approach to investing in clients. The selection is no longer based on short-term returns but rather how we can both benefit from the relationship.”
3.2 Precise roadmap to markets
Scaling the business given the market limitations
Create a systematic market roadmap to multiply opportunities in the primary markets
Power and Utilities, Silicon Valley, CEO
“A key solution for growth is to work with the right markets. Our company has a very precise roadmap to access markets. Many make the mistake of finding new markets instead of multiplying the markets they are already working on. Our solution is to work with the identified key markets and to find new opportunities within them. Market roadmap is an under-used tool. We use it rather than a strategy roadmap. If something does not work according to plan, the plan is altered and put to the test again.”
3.3 Early testing of the market with actual clients
Aligning company purpose with high-growth clients and markets
Early engagement with the clients in order to reshape the business to the high-growth market
Basic Industries, North America, Founder
“Some markets did not exist where all of the market research and megatrends suggested they would be. We found out the hard way about the necessity to commercially interact without the final product. We tried to develop the perfect product by mainly discussing with the engineers of our potential clients. And when we thought it was perfect, we started selling it. Unfortunately, the sales did not take off. Eventually, we found our fast-growth clients on a different continent and that required a complete change in our purpose. This was not easy for our team as everyone was tied strongly to the original purpose. Ever since, we have not counted on market research, rather engaged directly with our clients in a two-way conversation.”
3.4 Building the culture of creating a new market
Keeping the team’s focus on creating a new market
Hold only a few key guidelines and principles, but enforce them strongly as a means of creating a strong company culture
Hypergrowth Company, Silicon Valley, Founder
“Our firm has a few simple rules, which we enforce directly and strongly. One of them relates to our unique position in creating a totally new category of services to the global markets. I do not allow anyone in the team to talk about market share. If the mindset is to compare to others, it blows away the whole point of creating a new category. This is one of the rules which we enforced strongly to create the right culture. Culture is the key contributor for hypergrowth. My learning has been that it becomes difficult to control the culture directly after the headcount passes 50-100. Anything bigger than that requires a lot of effort to maintain the purposed, founder’s culture.”