For market-facing innovation projects, you should begin by identifying your target market segment.
The most common application of Minesweeper de-risking is market-facing innovation, that is, developing a new product for a specific market. Your team’s first step is to be very clear about what is—and is not—in your project scope.
In our Acme Composites Packaging simulation, the project team wishes to develop a new composite that could be used in corrugated boxes. But which market segment? The team knows that customer needs for packaging fresh fruits and vegetables could be very different than for consumer electronics.
A market segment is a “cluster of customers with similar needs.” It would be a mistake to develop a product for all packaging markets, because you’d likely compromise and please none of the specific market segments. You need to pick one.
A useful way to do this is to create a matrix as shown below. The rows represent the potential market segments you could pursue… beverages, fresh fruits and vegetables, etc. The columns are your criteria… the factors your team will consider when selecting one of these segments. In the example below, criteria include market size, growth rate, etc.
For each of these criteria, an A, B, and C level is determined, with “A” being the most attractive. Then the team works together to assign an A, B or C to each of the cells. The team selects an attractive market, typically with lots of “A’s”… in this case e-Commerce Retail.
The rest of the project will be in pursuit of a composite that will meet the needs of this market… which includes e-retailers such as Amazon and Zappos. But the team will also consider the needs of the entire value chain in this market.
So the assumptions it generates that “must be true” will consider the producer of box blanks (their direct customer), e-retailers that fill boxes (e.g. Amazon), those that ship boxes (e.g. UPS), and those end-consumers that open and dispose of the boxes containing merchandise they ordered online.
Keywords: project scope, market-facing innovation, market segment, target market, market selection matrix, value chain