By Aman Advani
In theory, a new company’s challenge is to create a great product and match it with the appropriate market. If done with the right economics in mind, that’s what leads to a successful business. But, as respected VC Bijan Sabet notes on his blog, just creating a beefed-up product and fighting for market share is not always enough.
For the bold who really want to create a category or invent a market, the challenge is greater -- but so is the potential reward. Professor Mukti Khaire of Harvard Business School recently completed a series of lectures titled “Value Construction and Market Creation,” where three of the examples were Whole Foods, Sundance Film Festival and our own company, Ministry of Supply. The problem for us was that the Ministry of Supply Case study -- titled “Will Professionals Demand its Performance?” -- was the only one that ended in a question mark. The others had proven their ability to invent new markets.
We’re on a mission to invent a new category. But on the way, we've learned that there's more to success than just creating this market. You also need to create the right company. Below is what we've learned about combining both sides.
Build a Unique Team
We're trying to create a market for "performance professional" apparel, and it’s not surprising how few people have experience with both sides. So when setting out to create a team, the first challenge is to clearly identify what skills and passions you are looking for. It's tricky to find people who've held similar roles, though these "unicorns" are out there. But this challenge will live on, so look for candidates who have a palate and passion for both spaces, even if only expertise in one. Find people who are thirsty to grow and merge these two worlds. It’s like finding someone who is bi-lingual in two specific languages, and their new task is to combine these into a singular and new language that no one yet understands.
Educate and Acquire Customers
As Professor Mutki noted, “clear categorical identities are essential to valuation because they allow actors to determine valid comparables, which are central to determining criteria of evaluation.” Essentially, without a proxy already on the market, it's your role to educate customers on the value and placement of your product. No system is prepared for a product that crosses multiple categories; for example, a wardrobe is normally split by "day or night" and "work or casual." This is a balance you have to navigate and explain to customers, though you can also lean on the adventurous nature of an early majority to help create the category with you.
After building the right team and learning how to speak to your customers, you then have to make the product you envisioned, which carries a new set of challenges.
Find the Right Production Partner
Every manufacturer has a sweet spot: the cross section of their background, passion and experience. But with new products for new markets, the skill sets required cross multiple of these. For example, when creating our first dress shirt we had to find either a dress shirt manufacturer with a heat press or an outdoor apparel manufacturer with the ability to stick to tight tolerances. But similar to potential team members, you can look for a production partner with one particular skill who may simply have a passion for the other. Find someone skilled in one area who is willing to try something new.
We also encountered another pair of challenges once ready to start production and go to market:
Create an Investor Base
Investors -- angels, banks, institutions -- all have expertise and hypotheses. Investors might understand part of your value prop, but rarely all. So the challenge is twofold: you need to teach them about your new market and convince them you're the best in it. Rely on partners who are willing to invest in your cross-channel team and traction. People who understand one side of the business and are comfortable taking an educated leap of faith on the other.
Create New Channels to Find Your Customer
A final challenge arises when you're ready to go to market: Where should you sell? From experience we suggest starting online -- the most industry, market and product-agnostic sales channel that exists. If you're interested in selling through other retailers -- which for us were stockists, boutiques and larger retailers -- you need to figure out which channels make the most sense. Target only those you think are willing to broaden their reach or who can educate their customers on the advantages your new product offers. It's a challenge, but exciting to pave a new path.
We've learned that the easiest route might not be the right one. Like us, you might be knocked down time and time again by these challenges. But as Whole Foods and Sundance demonstrated, the secret is that you have to do more than just create a high-quality, innovative product -- you have to invent a market, too.
Aman Advani is Co-Founder and President of Ministry of Supply, a menswear company focused on creating a new category of clothing, Performance Professional, through a collaboration between experienced engineers and seasoned fashion experts.
