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Spotting Market Opportunities

Finding new markets for your business should be a continuous process, in which conventional rules are challenged and change embraced.

This NMK seminar in May 2003 looked at why expanding your offer or diversifying into new markets could be the key to growing your company and staying ahead of the competition.

Speakers

• Craig Hill, Digital Outlook
• David Prais, Pembridge Partners LLP
• Dinis Cruz, DDPlus

Craig Hill

Inspired by his recent travels around the world, Craig Hill draws parallels with the rainforest to explain his faith in digital media's future. When a huge tree dies and collapses, a complex ecosystem of plants and organisms is also destroyed – just as the dotcom crash took out many of the businesses that were dependent on the internet boom. But in the forest, the collapse of a tree clears an area of woodland, allowing new ecosystems to establish themselves and develop. For those who are able to adapt and evolve, a market crash can actually create new opportunities for growth.

Despite the recession, the number of people going online continues to increase. The opportunities are there to exploit, but the key is being able to spot them. Spotting new opportunities is not only essential for growth, but also for survival.

For Craig, spotting new opportunities is simply about knowing the demands of the market, and being able to sell what is in demand at a profit. The irony is that the best ideas tend to come along when you are doing well, rather than when times are tough and the immediate future of your business depends on you finding new markets to exploit. Craig's advice is therefore to invest in research and development during the good times, as this will help you to grow and diversify into areas that could sustain you if the good times don't last. Don't wait until it's too late – thinking about new markets should be a continuous process, and never allowed to slip down your list of priorities.

Make sure your entire business is always on the look out for new opportunities, from the CEO to the receptionist, and involve everyone in brainstorming sessions. Take time to talk to your clients and prospects to gain a better understanding of their needs – both now and in the future. Have lunch with people from other industries to get different perspectives. Encourage networking, allow everyone in your company to take part in seminars and conferences, and don't forget to listen to their ideas and feedback afterwards.

Don't ever allow your business to become set in its ways or take its existing markets for granted. In an industry that changes so rapidly, it is vital to be flexible and adapt to change. If you allow inertia to set in you will get caught out.

Don't worry too much about being original. Craig recommends looking to other countries and companies in other sectors for inspiration, for while there are very few new ideas, a fresh approach to (or combination of) existing ideas can be extremely effective. Joint ventures and partnerships is another proven method of energising your business and sparking new ideas.

Craig also warned that you must be prepared for some of your ideas to fail – so don't expand beyond your means. The Small Firms Loan Guarantee Scheme (www.businessadviceonline.org) is a relatively low-risk option for small-to-medium businesses seeking finance for R&D and expansion. Testing and refining your ideas frequently during development makes failure less likely, but you must not be discouraged if things do occasionally go a bit pear-shaped– it happens to everyone. Sometimes it helps to take some time out and get a bit of perspective on where you went wrong.

Ultimately, Craig says, recognising and exploiting new opportunities is the lifeblood of any business, and going out into the market and looking for new opportunities can be tremendously exciting. But the best ideas will come to you when your enjoying yourself, so don't let the business run you.

David Prais

Having held senior positions in companies such as Dell and Gateway in Europe and the USA, and set-up, run and sold the largest online seller of packaged software (chumbo.com), David Prais knows all about finding markets for your business.

David's company, Pembridge, invests in creative services firms and specialises in helping them develop more innovative business models. One example involves the most recent album by the group Simply Red. Bypassing the traditional record company contract model completely, the artist, Mick Hucknall, and his management company, Silentway Ltd, formed the joint venture simplyred.com to manage the writing, recording, production, distribution and marketing of the album 'Home' -- with Pembridge advising on areas such as sales and advertising. Having cut out the record companies' hefty slice of the proceeds, all parties involved were able to enjoy a much larger share of revenues when the record went platinum.

Another example is The Rights Bank, a collection of TV production companies that got together to challenge the absolute dominance of the five terrestrial broadcast commissioners in negotiations over rights and intellectual property. By pooling rights and negotiating collectively, with the help of Pembridge, the companies concerned were able to increase their bargaining power and obtain better deals.

David also cited the classic example of the Italian washing machine manufacturer that bucked the trend one year by refusing to exhibit at the industry's annual expo of the latest models. Instead, they checked out all of their rivals' latest machines, incorporated the best features into their own new models a couple of months later, and cleaned up for the rest of the year, greatly increasing their market share in the process.

What all of these examples have in common is that they changed the way their respective industries worked by refusing to play by the rules. For David, it is essential to think differently from your competitors and change the way you interact with the market if you want to take advantage of new opportunities. While others play along with convention, you will be able to forge new routes to growth and success.

Dinis Cruz

For Dinis Cruz of DDPlus, it is not enough merely to be prepared for change when running a business – you must embrace the prospect and enjoy it. He seems to practice what he preaches, for during the last five years Dinis's company has made significant changes to its business model no less than five times.

DDPlus initially started out providing IT and network support. Through one of their clients, the opportunity to build a language teaching application came up, and DDPlus turned themselves into software developers. But as a committed advocate of the open source movement, this role didn't fit too comfortably, and Dinis changed the focus of his business from software developers to web developers, selling services instead of proprietary software products (at this point, some of the original company members left to set up a separate company concentrating on software). Over time, DDPlus began to find themselves in demand as consultants, and the core business of DDPlus shifted again towards consultancy projects. As these projects became increasingly concerned with IT security, and the company's expertise in this area grew, another change began to look tempting…

Now describing themselves as 'Non-executive Chief Technical Officers' to their clients, DDPlus currently provides a range of network security solutions, and is finding this new business model to be the most stable and successful yet. What DDPlus's story illustrates is that it's also possible to find new markets through organic evolution and a certain amount of trial and error. Their advice to other small businesses is to be as flexible as possible, follow your instincts, adapt to changing market conditions -- and enjoy the freedom this gives you.

Profiles

Craig Hill, Digital Outlook (www.digital-outlook.com)
Craig has 20 years of experience in marketing, IT and multimedia, starting his full-time career explaining what that funny ‘mouse thing’ was dangling from the keyboard of Apple Lisa and Macintosh computers. For the last 10 years he has specialised in the introduction of new multimedia technologies in media, playing an active role in the introduction of PC-based Digital Video technologies in the early 90s, and establishing Foresight New Media as one of the pioneering UK New media agencies in 1995. Over an 8 year period, Foresight developed in a number of new market areas, including a multidiscipline online and offline marketing agency, opening international offices, own product development and interactive TV, all through organic growth and joint ventures. Craig is now Managing Director for Digital Outlook.

David Prais, Pembridge Partners LLP (www.pembridge.net)
David Prais is a founding partner of Pembridge, and helps clients with mentoring, marketing, brainstorming and corporate strategy. Prior to joining Pembridge, David ran his own company, Chumbo.com, the biggest supplier of packaged software over the internet to the US market. He has worked as marketing director for Dell and ran Gateway’s marketing in the US including its international marketing budget.

Dinis Cruz, Managing Director, DDPlus (www.ddplus.co.uk)
Dinis Cruz is Managing Director of DDPlus, a company he originally established as an IT consultancy advising clients on implementation. As the company grew, it's core focus evolved to include web design, software development, and content management systems. DDPlus now specialises in IT security, and also provides a range of bespoke training solutions.

Have a look at the original event.