Data analysis · Startups

What are some data-centric resources you used to identify/narrow your target market?

Demelza Campbell Tech Workforce Program Manager/Recruiter at DOJ

June 11th, 2015

We are currently manually reviewing SBA data to determine our B2B target market, and we are hitting a wall.  Example: should we aim for organizations that make x amount vs. y amount per year in revenues?  Should it be a small business or a mid-size business?
We wanted to use data to assist in making the decision vs. "gut feeling".  Any resources, applications (preferably free!) you can provide would help!

p.s. VERY new to this venture. Excuse me if I sound uninformed!

Carlos Bencomo

June 11th, 2015

I'll fork over my 2 cents here and say that for every target market identification I've worked on, there hasn't really been a 'software' or 'application' outside of revenue opportunity projections in excel with sources for particular assumptions (so for your question on which org at what income, I would say basic variables for a projection model would include # of X-rev orgs, # of Y-rev orgs, % of X orgs you can successfully target, % of Y orgs to target, % of X orgs adoption rate, % of Y-orgs adoption rate, projected increase in adoption given some % success in marketing (adoption rates are finicky b/c they can feel a lot like guessing but informing these assumptions with real-world data / historical success / your own market testing / results from similar companies can really help reign these in)...

there's also assumptions to build around what you're charging an X-rev org vs a Y-rev org, smaller revenue businesses might mean more volume at a reduced price point, likewise bigger revenue businesses might mean less volume at an increased price point, those market opportunities will have different sizes

moreover, there's a question of overall market competition and what % market share you think your company can realistically aim for (this should provide you an early ceiling perspective for both X-rev orgs and Y-rev orgs).

I would also say that even at different price points, there could be different margins, I'm not sure of what service you might be offering but higher volume services can sometimes see scale efficiency that can potentially expand margins while lower volume services can be more customized and retain higher costs (this should seem intuitive as more customized options aimed at bigger rev orgs (y-rev) have higher price points and will makeup the margin loss in profit magnitude)

As you can see, there's quite a few variables to take into account, you can form a basic P&L projection with these variables (price, cost, market size, % mkt adoption/share, forward trend) and make a more informed decision on which market to target.....

This can seem like a very objective, mathematical approach, and it's important to remember you have other things to consider like, where you're located and what the relative size of the market is to you, or where the better penetration point in the market might be irrespective of overall income opportunity, so location, stickiness of service, etc., can all inform this decision as wel

David Telleen-Lawton Using Customer Discovery to mold innovative Master of Technology Management degree

June 11th, 2015

The best data-centric resources are any that can provide you with enough data so that you can direct your "sales force" to call on them.  In other words, it depends on your target market.

The main resources for understanding your target market are your customers (if you have some), your competitors' customers (if someone else is already "solving" the problem you solve or creating the opportunity your product/service creates), and those prospective customers with whom you and your team have met as you tried to "sell" your product to those you thought might be willing to "pay" for it.

I could be more detailed if I new the product/service, etc.

My main point is that it is premature to focus on a data-centric resource before you have met as a team, face-to-face with enough prospective customers (or others as mentioned above) and from those meetings have figured out where the ripest fruit on the lowest branches with whom to start.  Armed with knowledge of your validated target market, I can imagine you will quickly find some data that leads you to more.

Are you familiar with Customer Discovery or Lean Startup?  Check out this video if you are not... 

Demelza Campbell Tech Workforce Program Manager/Recruiter at DOJ

June 11th, 2015

@david - you make a very valid point.  That would seem to be the the best grass-roots option, i.e. whatever "customer" we have available to us is a test as to the validity of our product; and rather than spending oodles of time scrounging data to find the "right" customer - just go after people that seem to fit and validate.  Thanks for that.  It's easy to get stuck in constant analysis, which is something we don't want to do.

@stephen - you know me well!  thank you for that because we are RIGHT around the corner from figuring the MVP; so this helps and that blueprint may be able to slide right in too! ;)

@carlos - your "2 cents" are worth a lot more.  That is a very technical/financial way of looking at it that I don't think our team considered and I think it may be able to be leveraged down the road to ensure our target market maximizes our returns.  Thank you!

This was my first question on FD.  You all made it an awesome experience.  Thank you so very much!  I look forward to providing you insight as well!

Stephen PMP Project Management Professional

June 11th, 2015

Ever heard of the term Minimally Viable Product (MVP) aka prototyping? Oftentimes, you'll use the data collected from soliciting your MVP to a sample set of potential clients to further hone your target market. Have you done this? If not, it's no big deal (yet). Try this resource to start -  

Yes. It's free. :)

I've got a blueprint for doing an MVP as well from a former director of IT at U of Maryland if interested.


Michael CISSP Attorney/Consultant at Self Employed

June 11th, 2015


First off,  I would advise against apologizing for being new at something.  It means you have courage and fresh eyes.  

To answer your question, I very much agree that prototyping will help to inform your decision.  Also look at a weighted probability matrix to determine anticipated ROI.  As was pointed out earlier, this is all fairly standard graduate level B school stuff rather than an application.  It is usually done in excel. 

You may want to consider some market research as a means to inform your decision as well.  Additionally I believe the SBA provides mentors who can also be of assistance with some market insights.  

Another tool might be porter's 5 forces to look at feasibility relative to each market.  

One last point to consider is are you breaking up the markets in the way that works best for your business?  You are currently looking by revenue, but it may make more sense to break it up another way for example geography, # of employees, industry...  Just because something is a "standard" does not mean that it is the best approach for you.  Good luck!