04 Sep Finding “beachhead” Markets in the 50+ Space
The whole concept of the so-called “beachhead market” is named after the World War 2 initiative where Allied soldiers stormed the beachheads of Normandy enabling them to subsequently control and then dominate one of the most important battles of the war. Finding your beachhead market is therefore potentially one of the most important strategic moves any company can make in setting up the foundation of the new business, using the early “safe” beachhead of one segment that can readily buy a new product or service, before looking to extend the offer to another segment, and thereby avoid spreading the new enterprise too thinly.
Author and MIT startup mentor Bill Aulet, who has written most extensively on this subject, defines a beachhead market as:
“the place where, once you gain a dominant market share, you will have the strength to attack adjacent markets with different opportunities, building a larger company with each new following”.
He goes on to say that the three conditions that define a beachhead market are:
- The customers within the market all buy similar products/services.
- The customers within the market have a similar sales cycle and expect products/services to provide value in similar ways.
- Word of mouth communication exists between customers in the market (e.g. they may belong to the same self-defined group, be in the same industry, or be in the same location, etc.)
In Business to business (or B2B) markets this means that a beachhead consists of companies that are most likely to be the best type of target or operate in a relatively homogenous sector. In Business to Customer (B2C) markets, this will mean a specific group of people who perhaps have a similar perspective or profile, and even view the world as it relates to a particular product or service offering in the same or at least very similar way.
This idea of establishing a beachhead market, and looking to make good traction in it, has caught on with many startup companies these days and in the angel and venture firms that back them, with VC heavyweights such as Peter Thiel advocating for this to be standard operating procedure to help de-risk early stage projects and even get revenue flowing earlier. This means that many companies now work hard to discover where the segment with the most “pain” or need might be and how to best reach it. In some cases, this can be done initially with desktop research but is always best supplemented by real customer discovery in the field so that questions can be asked and opinion solicited, so that the guesswork can be validated.
Although this beachhead market customer discovery has become widespread in the general entrepreneurial world, it is infrequently used when a company is seeking to target older adults. This is partly because “older adults” are mostly viewed in society as one large group, often ranging from 50 to over 100 years of age. However, it is also because published data about older adults is poor, missing both demographic granularity and with little detail about changing preferences from one sub-population to another within the entire population set.
The only viable approach here therefore is to often skip the desktop research and to go straight to direct customer discovery. Doing this can be done by indirect survey, but given the nature of this population, face-to-face interface works best and can range from organizing pre-planned focused groups or even organizing co-creation groups. A co-creation group needs more care to set up but can be a powerful way to both solicit real and deep unmet needs and to ask for feedback on prototype product or service ideas.
To take a simple example, a company might have a new “health drink” which perhaps has supplements, which are advocated to be good for customers. Where an older adult market is targeted this may often be an extrapolation from a similar product offered to younger adults and may involve little reformulation or packaging, perhaps to save time and money. In soliciting real and ideally face-to-face feedback from older adults however, a number of issues may arise. A few of these might be that the viscosity needs to be “thinner”, the flavor and color may need to be adjusted, the unit sizes smaller or larger, and the packaging redesigned.
Depending upon demographic issues such as gender and age, it may even be that opening the package may need to be made easier and package description font styles and sizes made different (often so that people can see or even braille added in some cases). Of course, all of these are mere hypothetical speculations. Only real people in the target segment can confirm or deny these guesses, add to them and ultimately actually tell you what “job” they want to hire your product or service to do for them.
Don’t forget that all of this will depend on the older adult segment being targeted. Hence, a single, optimistic, female of 55, with European heritage roots, who lives alone and drives and walks every day in her downtown area, but has type 2 diabetes and shops mainly online, is likely to be very different to a serious married male of 75, with Asian roots, suffering a mild heart condition, who shops once a week in his rural village and walks from shop to home with a cart, because he doesn’t drive.
The simple point here is that failing to solicit older adult input, and especially in a relatively narrow beachhead market, will not only miss the mark but will undoubtedly lead to what might be substantially slower sales and lower profitability.
Jon Warner, CEO, Silver Moonshots
Silver Moonshots helps startups, early stage, and mature companies to better understand older adults at a deeper demographic and psychographic level so as to make products and services better for them and the companies providing them.