ASK A MENTOR

Anil Joshi

Business Line introduces a new column where a panel of experts – angel investors, seed fund partners and venture capitalists – answer questions from B school students and young managers on issues relating to starting ventures and taking forward an idea.

Questions can be sent by email to > [email protected] , clearly mentioning your name, educational institution, course and email address.

Anil Joshi, President, Mumbai Angels, kicks off this series by answering questions from Nirav Sarvaiya, a student of IIM-Kozhiode.

Nirav: Before joining IIM-K, I had a small but successful venture. Now I am contemplating a large-scale venture. However, there are some obstacles and doubts on the way forward which I would like to have answers to. They are as follows:

How to estimate the number of consumers for your service or product from the population? Being in Kozhikode we have limitation in carrying out market survey, especially if the service I am offering is for people in metros.

Anil Joshi: In the absence of what service or product Nirav is referring to, it is difficult to give any specific comment. But this is a basic problem faced by almost all start-ups. For any new business it is important to understand the TAM or who the actual customers are, enabling one to plan accordingly.

Most of the time estimated market and the actual market is totally different or may not even exist hence it is important to understand and have proper estimation done to have winning sales and marketing strategy. Following points may help in estimating market size.

What problem is getting addressed by your product and service. Are potential consumers willing to pay for it?

How much the consumer is willing to pay for your product and services? This will help in gauging the market potential and acceptance of the product and service. It is better to try with small early adopters for their feedback.

What is Total Addressable Market. The addressable market may be quite big but how many consumers are actually willing to pay and consume the product and services. You may feel that your idea would address the entire market but in reality only a small section of consumers would be willing to buy. One should try to avoid over estimating.

Try getting feedback from consumers. Avoid estimating market-size based on your experience and assumption. Based on initial feedback do survey among actual users to get their feedback to arrive at realistic market.

Having proper revenue model will help define right market size.

How you are going to sell your product? Will it be online or physical store? Whether your own store or franchise model? All these will govern the market size.

Where are my customers? Do proper research in understanding your target market demographics enabling you to define market size?

Do I have market beyond what I am thinking?

How to protect your idea from being adopted by others if it is presented at some forum?

AJ: This is a dilemma for everyone. But then how do you get your idea across if you don’t reveal it. Idea protection is important especially if it is not registered for protection. Hence, I suggest you reveal only the crux of your idea to the audience so that the participants get the flavour. While your idea may be unique, you need to keep in mind that there may be others who are working on the same stuff. It is difficult to protect the idea alone. The best way is to start work on it quickly. Here are a few suggestions to protect your idea.

One can get the idea registered before presenting it at any forum and highlight the same during discussion.

Have confidentiality note signed before presentation if acceptable to audience, which is a common practice.

Have trademark registered.

If you are distributing some write-up then mark on it confidential and proprietary.

If possible get copyright registered.

File for IPR.

These suggestions may help a bit, but I would suggest that you should not reveal too much about your idea and focus on executing before anyone can copy your billion dollar idea.

Published on October 20, 2013

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