Seth wrote an insightful article on marketing a new business. He asks you to define if you are selling to a new market or a share of an existing market, because the strategy is highly different.
Getting new people to enter your market is hugely expensive. There’s no way I can persuade a non-book buyer to start buying books–I don’t have enough time or enough money.
With a new market and a new product, there is often a leverage factor called “First mover advantage.” Assume you are inventing a better mousetrap. It’s no more expensive than manufacturing a prototype of the mousetrap and selling it to millions of desirous existing mousetrap buyers. However, if you want to sell a banana juicer as the next big thing, you need to convince people why they would want to juice bananas to begin with.
Being First-mover can be an advantage when you invent something that helps solve an abundant existing problem. If your solution is the only one available, you will quickly gain all of the niche market – ex. Yoga for Leather Clad Harley Bikers. But, you first have to convince them that your solution solves it. This can be expensive to address, as advertising cost can be high – everyone is a “new customer.” Getting distributorship can be hard, as no one is willing to risk their shelf space to an untested product. But, getting investors, can often be an easier task. A VC is often much more willing to invest in a solution to a new problem than a new solution to an old problem.
With the required money in being First to market, it is recommended that inventors with real gusto stick with what they are best at, and leave the funding up to the believers and their first real customers, the Angels and VCs. Build quick, build well, and get it out-the-door fast.