Market Monitoring for B2B Tech Startups Top…
The success of your B2B tech startup will benefit hugely if you have a deep understanding of the market you are selling to. This involves more than just knowing who the key players are, as it requires continuous monitoring of market trends, customer behaviours and competitor moves. This practice, known as Market Monitoring, is crucial for any startup aiming to sell a tech solution to organisations. Paying attention to your target market must be a priority, not just for your leadership team but for everyone in the business. If you don’t know and understand your customers, how can you build appropriate solutions for them, market to them, sell to them, and support and collaborate with them? Market monitoring is a key part of working to help progress and transform an industry with your solution.
Who to Monitor
If you have a specialist technology for a niche sector within a single industry, then market monitoring that can drill down to specific target companies is a very realistic and effective strategy. This becomes more challenging with a generic solution for a broad or horizontal market. For example, let’s consider a data security solution that can be used by any size of organisation in any industry that processes information. In this scenario, you may focus on monitoring macro indicators and general trends, while keeping an eye on specific enterprise accounts to assist Account-Based Marketing (ABM) activities.
Start Narrow
New B2B tech startups are often highly focused on fixing a specific problem for a single user type, product category and market niche, rather than generic solutions for mass adoption. This is because the narrower the market in terms of the target audience, the more relevant the proposition can be to the buyer. This makes your marketing more targeted, relevant and effective, which gives you a realistic chance of gaining attention and winning new business to gain market traction. Even if this approach may appear to represent a smaller addressable market, it is more likely to get results. This is because you have a well-defined and understood prospect list to focus on.
Expand From a Position of Strength
Starting a business with a highly focused proposition is more manageable and straightforward. It’s much easier to expand to adjacent markets after establishing a foothold in the market, rather than spreading resources too thin and attempting a full-frontal attack. Even startups with more generic products are advised to first address specific industry sectors, with early adopter characteristics. Having established a position of strength, it may be possible to accelerate growth with new products for existing clients or move into adjacent sectors. Many of the tech firms that dominate their markets today started modestly, even though they had big ambitions; they then grew by widening their appeal across broader segments and markets at the right time. Smart tech firms leverage hard-earned success by showcasing their provenance to go both deeper and wider.
Top 6 Methods of Market Monitoring
Here are some of the key methods of market monitoring, helping to demonstrate why it’s a vital activity for startups looking to thrive. All founders and their senior leadership teams must be engaged in this activity, with marketing and sales teams paying particular attention so they can use the information to adjust their plans as appropriate.
1. Understand Market Trends
Market trends are the driving forces behind industry changes, and they can, if unchecked, significantly impact the success of your startup. Monitoring these trends helps you stay ahead of the curve and anticipate the needs of your target market.
Key Market Trends to Monitor Include:
- Technological Landscape
What key technologies are relied upon to run the businesses in your target market, and what advancements are driving progress, such as AI, blockchain, IoT, etc.?
- Customer Behaviour
Monitor changes in how your target companies interact with their customers, including the adoption of digital tools and platforms. Also consider their perceptions, opinions and preferences regarding other tech solutions and the nature of any commercial relationships they may have with other vendors.
- Regulatory Changes
Stay informed of new regulations or standards that may affect the industry and create opportunities or challenges for your solution.
- Economic Forces
Keep an eye on local, national and international economic factors. It’s important to keep tabs on inflation and currency fluctuations that might influence budgets and purchasing decisions. Fluctuations in the economy will directly impact commercial decision-making. Understanding these challenges can help in pricing and positioning your product.
- Political Landscape
Intrinsically linked to the economy is the current and future political environment that may directly impact how your business is run or how your solution is adopted. New regulations or political instability can create barriers to market entry or affect the demand for certain technologies.
- Geographical Challenges
For international companies, geographic factors such as time zones, language barriers and regional market preferences can complicate service delivery. Startups often operate on a local basis initially, so this may not be a critical factor in the early stages. However, once investment is secured and your startup enters the scaleup stage, this may involve entering international markets, where these issues become pertinent. For example, there may be geographical concentrations of your target audience that you can more easily reach and serve from a specific location.
- Supply Chain Challenges
Understanding the supply chain challenges of your target market and how key factors impact their operations could reveal new opportunities for you to step in and help them with a solution.
Keeping a close eye on these trends can help align your solution with the evolving needs of target companies, ensuring you are always relevant and competitive.
2. Identify the Key Players
Knowing who the key players are in your target audience and watching them closely can be a very useful strategy. These companies set the standards for the rest of the industry and often drive market opinion and trends, such as technology adoption. If any of your customers are considered industry leading businesses, and you can turn them into advocates, this will help you increase brand awareness and capture the interest of more target companies looking for a similar solution.
To Identify the Key Players, Do the Following Research:
- Market Research
Use industry reports and analysis to find out which target companies dominate the target market and why. Look at industry directories, company reports and read the industry-focused media to stay up to date. Acquire industry data to ensure you have the full firmographic information and contact details of every target prospect.
- Competitor Analysis
Regularly analyse the offerings, strategies and market positioning of your direct competitors. Understand their market penetration and their strengths and weaknesses.
- Customer Feedback
Engage with prospect customers to understand which vendor technologies they currently rely on and why. Understand what they think about these competitors and the level of customer satisfaction they provide. Any gaps may indicate areas where your startup could fill a gap to offer a superior or alternative solution.
Understanding your target market in detail and how competitors conduct their business can provide invaluable insights into their strategies, strengths and weaknesses. This helps you identify new opportunities in the market and for clearer differentiation.
3. Competitor Analysis
You must know who the IT solution providers are already serving your target market with similar or adjacent solutions. They can be both competitors and potential collaborators. Understanding their role is key to positioning your startup effectively.
- Vendor Offerings
Research the existing tech solutions provided by other vendors and analyse their market share, strengths and weaknesses. What do companies in your addressable market pay them for and how much?
- Partnership Opportunities
Identify appropriate vendors that may be open to partnerships or collaborations, especially if their offerings complement your solution.
Understanding competitors can help you strategically position your startup, either by competing directly with existing players, by offering a complementary solution or starting a new sub-category to address a specific problem and audience. Partnerships can also be entered to help accelerate any of these strategies.
4. What Do Your Customers Do for Their Customers?
Looking down the value chain, it’s important to understand how your target audience serves their customers and where they create business value. This requires a deep knowledge of the industry and how your clients operate, so you can identify areas where they may have significant challenges. Having deep industry knowledge can be an unfair advantage, provided you can apply it to your solution to offer a vertically focussed answer to a real and challenging customer problem. This can be a superpower for any startup, providing significant differentiation by offering industry-aligned or tailored solutions.
- Customer Experience
Study the customer experience offered by your target market. What do they do for their customers? What are the pain points that cause the biggest issues? How do your clients interact with their customers? What do their customers like and dislike about them? There is much information to be gleaned from this research. Discover the most pressing issues that stop them from being effective and use that to build a value creation story around your solution.
- Value Proposition
By analysing how your target prospects address their markets, as well as the messaging and language they use to promote themselves to their customers, many important lessons can be learned. How do they attempt to differentiate themselves? What can you do to help them boost that differentiation? What are their strengths and weaknesses? How can you help them overcome their biggest challenges?
- Identify Solution Gaps
Use the information gathered from your research to identify where your startup can make the biggest difference because the market is underserved. Speaking to existing customers can be an invaluable source of information, as it can reveal new and exciting opportunities that would otherwise be difficult to uncover. It’s not possible to say yes to every customer request unless it makes sense and is within your vision and capability. Customer insights can be a great source of inspiration.
Remember, in essence, the purpose of your startup’s existence is to deliver a better solution to your clients. To do so, you must fully understand the customer and then figure out how to significantly improve what they are trying to do. Always think in terms of your customers’ customers, so you can align your solution with their combined needs, delivering tangible improvements throughout the value chain. This is the fastest way to create a compelling proposition that resonates in the market.
5. Who is Buying Who?
Mergers and acquisitions (M&A) activity within your target market can significantly impact the environment and the readiness for prospects to buy your solution. Identifying which companies are acquiring others in the industry provides insights into market consolidation and emerging opportunities. The acquirers will have different strategies and needs, such as integrating new assets into their operations and rewarding investors with a faster return on their investment through efficiency gains and streamlining operations.
Companies in your market that are potential acquisition targets will be trying to make their businesses as attractive as possible by scaling and improving operations with the latest technologies and demonstrating a healthy financial performance. You will need to map your solution onto the lifecycle of a target company and understand the timing of when they are most likely to be ready to adopt and afford your solution.
- M&A Trends
Keeping track of recent mergers and acquisitions in the market can provide useful insights. Which companies are acquiring smaller players and why? What opportunities or threats does this represent?
- Strategic Implications
Analyse how these mergers impact the market and purchasing decisions for solutions like yours. Are there new power players emerging, or is the market becoming more fragmented? Can you partner with the major players to help them improve their M&A activity? When is the optimum time for you to engage with prospects, in respect to their exit or acquisition strategies?
- Solution Development
Identify any opportunities that arise from these M&A activities, such as gaps in technology and capability. The companies that grow significantly through acquisition, may have emerging needs you are better placed to assist with than anyone else. Develop new features or related products to serve them and investigate which partnerships may help you accelerate the process.
Constantly monitoring M&A activity helps you anticipate changes in your target market. In this way, you can adjust marketing and sales tactics based on your targeting criteria and understanding of when a company is ready to buy your solution.
6. Active Investors
Knowing who the most active investors in your target market are can also provide valuable insights into trends and potential funding opportunities. Talking to them and even marketing to them could help open doors into the assets they have invested in. Make them part of your network and demonstrate to them how your solution helps accelerate the growth and value of the companies in their portfolio. Their influence on decision-making in the boardrooms of your target prospects could be positively influenced by engaging directly and appropriately with the investor community. They have the power to make introductions if they like what they see.
- Key Investors
Identify the private equity firms and other investors who are most active in your target market.
- Investment Trends
Analyse recent investments and acquisitions to understand which areas of the market are attracting the most capital and why. What does this mean to your customers and target prospects, does it mean they have a higher or lower propensity to buy your solution?
- Build Relationships
Consider forming relationships with key investors where appropriate. Show them how you can help the companies they invest in and increase their return on investment.
The investors who are most active in your target market are a great source of information to learn from and potentially work with. Use this opportunity to position your startup to build relationships with target prospects and align strategy with investment trends.
Continuous Monitoring
Market monitoring is not a one-time activity but a continuous process that all good tech companies invest time and resources into. It helps you stay informed about important market dynamics that could impact your performance. Comprehending the structure and workings of the market provides you with better ways to message, present and sell solutions to clients who need help. Always consider who your customers are trying to create value for and how, so you can see through the value chain of your customers’ customers. Market monitoring can be an indispensable tool, helping you to understand the complexities of your target industry, allowing you to react quickly to opportunities, differentiate your offering and build a sustainable competitive advantage.
You may want to read: “5 Step Guide to Crafting Your Problem Statement.”
