The gap-in-the-market model
How to recognise a bankable idea
The goal of every new business is to discover and occupy a gap in the market. But what is the best way of proceeding? The gap-in-the-market model helps by depicting a market in a clear, three-dimensional way. Draw three axes that measure the development of your market, your customers and your future products.
Say that you want to launch a new magazine. Then:
The x-axis is Cost-effectiveness - how economical is your product?
The y-axis is Prestige - how well-known is the product?
The z-axis is Awareness - how loud is your product?
Position your competitors' product on the graph. In areas that are dense with competitors, you should enter the market with your business model only if it has the potential to be a 'category killer'. For example, Grazia was able to conquer the already crowded women's weekly market by combining sophisticated fashion news with strictly A-list gossip. Look for a niche, an area that has been overlooked and that is not yet occupied.
Beware! If an area is completely empty, you should check whether there is a demand there at all.
Positioning is like drilling for oil. Close is not good enough.