Why is Market assessment necessary for
enterpreneweship?
Answers
Explanation:
Market assessment is a detailed and objective evaluation of the potential of a new product, new business idea or new investment. It is a comprehensive analysis of environment forces, market trends, entry barriers, competition, risks, opportunities and the company's resources and constraints.
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Answer:
When assessing investment opportunities, one of the most frequent questions I ask entrepreneurs is about market analysis. Although it is a crucial element of the conversation we have, I have a feeling its relevance is often neglected (to be honest, I’m not sure what the reasons are, but that is another topic of discussion). Given the high risk associated with running a company without a proper understanding of the market, I would like to highlight the importance of market analysis from a VC’s perspective. Firstly, I would like to cover investors’ motivations behind requesting a market analysis, as well as discuss the importance for startups to do it right.
Knowledge of your market is critical, whether you are a startup raising money, attempting to find product-market-fit, launching a new product/service or targeting a new segment. It is not always straightforward; the market can be difficult to assess, due to lack of data sources or the entrepreneur’s lack of familiarity with the market analysis process. Nevertheless, you must develop a view or make an educated guess, in order to progress. Failure to do so might have painful consequences in the long term, as you make key business decisions with incomplete information.