Junior PM to CEO: Hacking My Way to the Top - Chapter 1 - Choosing Potential Market Segments

Finding paying customers is the lifeblood of any business, and it should be the top priority when choosing a market segment. Forget trendy ideas, chase customer wallets!

There is a question. Imagining you are a merchant, selling spicy hot pot in a desert with a temperature of 50 degrees Celsius. Would anyone buy it, or would you sell a whole can of frozen Coca-Cola, which would be more popular?

On top of that, do you know that Coca-Cola's early business model was to sell Coke and help their distributor find a way to solve the refrigeration problem so that consumers could more easily buy cold Coke?

Generally speaking, there are two main logics for choosing a startup market. I believe that in the end, both logics will lead to the same result.

The first logic is to target 80% of the market and solve 80% of the pain points. This is the logic espoused by Lei Jun (the founder of Xiaomi) and Sun Tuoran (a serial entrepreneur in China with 2 IPOs).

The second logic is to focus on a niche and become a monopolist. This is the logic espoused by Li Kaifu, Wang Hua, and Fu Sheng.

For example, Foundersbacker's first internal startup focuses on converting agricultural waste into natural, biodegradable materials. These materials can be used to create a variety of derivative products, each of which has the potential to become a monopolist in its own segmented market.

For example, sugarcane residue can be used to make biodegradable plastic pellets, biodegradable plastic products, biodegradable paper, biodegradable paper products, and biodegradable utensils.

As I mentioned earlier, the two logics may seem different, but they will eventually lead to the same result if the company scales up.

However, the first step in any startup is to find willing paying customers. The product should better with some kind of barrier to entry, so that the company can stand out from the competition.