Good Cleantech Ideas Require Large Total Available Market
I’m at the Clean Business Investment Summit, checking out the entrepreneur presentations, where I volunteer to function as a mentor to the presenters and to moderate discussions between entrepreneurs and cleantech investors. I’ve seen a few really interesting concepts so far this morning.
Ooops, here’s one that’s a poster child for a business plan flaw I call “Limited Total Market.” It’s dehydrated baby food for backpackers. How many people went backpacking last year with their infants? Of them, how many resented the extra few ounces their baby food weighed? Sorry.
Sometimes it makes sense to make a product for a limited market if there is a significant demand and little competition in that market in which case one could make considerable money by entering that market. That is a principal which many companies do not seem to understand. Of course, there has to be a significant demand, even it is is limited. But in the case of freeze dried infant food, it would seem that the demand would be so limited that entering the market would make no sense. I doubt that those proposing it have done any market research.
That’s such a limited market, it’s funny. But freeze dried infant food might have a larger market than backpackers. How about world travellers who down’t trust the local food? Can you imagine trying to pack enough jars of baby food for a week in a suitcase?
That could be a possibility, but making it work would be a marketing problem. Generally freeze dried foods are sold at stores which sell hiking and camping equipment, but they would not be appropriate places to sell freeze dried infant food. Stores that sell suit cases and similar traveling equipment would be a better bet. Travel agencies and Internet sites for travelers could have links to the manufacturers of freeze dried infant foods. Considering the limited market, probably Internet sales would make the most sense because that would eliminate the need for retail stores to carry the product.
True. I can imagine taking my infant to Mali for a week. Wait a second; no I can’t. 🙂