3 Ways To Educate the Market That Actually Work

Everyone knows educating the market is hard to nearly impossible, but people always bring up examples like Facebook or the iPhone whenever I discuss it in my lectures. So what can and cannot work when you want to educate the market? It’s all about what you want to educate them on.

Educating the market has a bad reputation, and rightfully so. It’s nearly impossible to do, and even if you can do it, in most cases your startup won’t survive the time it would take in order to see its fruits. It’s not a coincidence that Facebook wasn’t the first social network and that the iPhone wasn’t the first smart phone attempt. But on the other hand, how can you innovate if you don’t teach the market anything new? Some people actually claim that this is the new way of selling. You want to educate your audience rather than to sell to them directly. Become their trusted advisor, and the rest will follow. So who is right?

Let’s start from the beginning.

Any form of marketing involves educating the market on something. Even if you are advertising in order to build your brand (think Coca-Cola or Nike), you are educating the market on the kind of company you are (or the kind you want to be, but that’s for a different post). If you are simply advertising your product, you are educating the market on the product and on why it is better than the competition, namely your unique value proposition. So some education of your audience is always happening.

The reason that educating the market is considered a bad idea lies in the context: the term “educating the market” usually comes up right after the problematic claim that “they just don’t get it”. It is often used as an excuse as to why you haven’t succeeded (yet). In that context, educating the market means ignoring what the market is trying to tell us, and that really is a bad idea for anyone who wants to succeed.

So how did Facebook and the iPhone succeed? Despite the fact that they weren’t first to the market, they still needed to educate it. The thing is that they educated the market on very specific things, ones that can actually work.

Let’s get right to it: what are those things you can educate the market on, and where are you setting yourself to failure? The answer to this question is based on the “Product Circuit” model that I use to help companies get to product-market fit and presented here a while ago. 

As a reminder, the model breaks down the strategic product thinking into four distinct components: the problem, the solution, the product, and the market, which is where business actually happens.

In the example I used when presenting the model, we said that the problem you want to solve is to help people get faster from one place to another. There are many possible solutions (or solution types) for this: an airplane, a car, an electric bike, and all the way down to route planning and navigation software. Each of these solutions can have several different products that implement them. For example, if the solution is a car, then the variety of cars out there are the products.

You can educate the market at each of these levels – the product, the solution, and the problem. Deciding which level is right for you depends largely on the market and the maturity of your domain. In a way, once you are set on your target market, the level you are at is no longer for you to decide. You need to understand the market and act accordingly. The key to understanding which level you are at lies in understanding where your differentiation is – at the product level, the solution level, or the problem level (that is, you are tackling a problem almost no-one else does).

Each level requires a different marketing strategy. While the marketing strategy is typically not for you as a product leader to define, the unique value proposition definitely is. The better you understand which option you are at, the easier it will be for the marketing team to develop the right strategy. Moreover, if you are into product-led growth, the product itself has a critical role in educating the market, so you better know what you are doing.

Option 1: Our Car Is Better Than Other Cars

When the problem space is mature, and your audience is not wondering whether or not they need such a product, but rather which one to choose, this is the right level for you. When I work with companies on their unique value proposition, and they explain to me that unlike everything else out there, their solution “just works” or “is so much easier to work with”, it is also a good signal that the company should speak at that level. If you ask them, they will often admit that their innovation lies in the product’s details or its integrations, and they don’t consider it too disruptive.

This might sound like a problem, but there are great companies that succeeded in these exact situations. Think about Zoom, Monday.com, or any new smartphone release.

Option 2: Cars Are Better Than Horses

When you are creating a new way of doing something, this is the level for you. This “new way” needs to be significantly different from the existing alternatives, a whole new approach, and not do the same thing better or more conveniently (which would put you back in option one above). Many startups fall into this category. If your pitch says you are “reinventing something” – that’s where you are at.

This means that the problem is already evident, and people know they need a solution, but also that your approach for the solution brings it to a whole new level.

When the iPhone first came out, it fell into this category. It wasn’t the first smartphone, in the sense that it was a device that combined your cellular phone with apps that require internet access. I owned a Blackberry and used it for work and email for three years before I got my iPhone. It definitely wasn’t the first handheld computer.

Besides the convenience and sleek design of the touchscreen instead of the keyboard, Apple’s innovation was that the iPhone could replace more than just your former handheld device. It was perceived as a successor of the iPod for your music and also a high-quality camera that is always with you. The combination of all of these made it such a loud revolution.

Other examples in this category are Google Docs, Airbnb, Uber, and Salesforce CRM when it first came out.

Option 3: You Can Actually Get Far, Far Away

When you tackle a problem that people didn’t really solve until now but rather worked around or made do with not so great alternatives, you are at this level. Many blue-ocean startups start here.

If, when you analyze the alternatives that your potential customers have, you find out that they are trying hard to solve it, but there is no real resolution, that’s a good sign. If you see them reinventing the wheel and creating all sorts of hacky processes to handle the problem you are solving (and still struggling with it), this might be it. 

This option is what people usually mean when they talk about educating the market. In this option, people are not looking for a solution to their problem because they most likely don’t think there is one. They might believe that they are the only ones with this problem. When you educate the market in this option, you first need to acknowledge the problem, then explain that solutions actually exist. It is only then that you can discuss why yours is better than all others.

This is a lengthy process – and that’s why you need to consider it very carefully, but it can definitely work. Think about HubSpot, which created the inbound marketing category, and PayPal, which solved the secure online payments problem back in the days that exposing your credit card number on any website was extremely risky.

Here is the caveat though: for this option to actually work, the underlying need must be there, and must be significant enough in the sense that people would actually want to solve it (and pay you for that). If your customers have a certain problem, you can educate them about potential solutions, but if the problem isn’t important enough for them, they wouldn’t care and it wouldn’t work. 

That’s where most market educators fail, and that’s why it’s considered such a bad idea. If people don’t want to get far, far away, even if your product can teleport them, it wouldn’t succeed.

If you decide to go for it anyway, make sure you don’t lose sight of these two points: make sure you are not inventing a problem that people don’t really have, and prepare for a long long journey, both financially and mentally.

Our free e-book “Speed-Up the Journey to Product-Market Fit” — an executive’s guide to strategic product management is waiting for you

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