{"id":134533,"date":"2024-10-21T14:05:09","date_gmt":"2024-10-21T18:05:09","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=134533"},"modified":"2024-10-28T14:12:17","modified_gmt":"2024-10-28T18:12:17","slug":"starving-crowd","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/starving-crowd\/","title":{"rendered":"A Starving Crowd: How to Find the Right Market (Alex Hormozi)"},"content":{"rendered":"\n

What makes a market truly worth pursuing? How can you tell if your chosen market will support sustainable business growth<\/a>?<\/p>\n\n\n\n

Finding the right market<\/a> is crucial for business success. In $100M Offers<\/em>, Alex Hormozi uses the example of a “starving crowd,” emphasizing the importance of targeting customers with urgent needs and the means to pay for solutions.<\/p>\n\n\n\n

Continue reading to explore how to identify and commit to a market that will help your business flourish.<\/p>\n\n\n\n\n\n\n\n

A Starving Crowd<\/h2>\n\n\n\n

If you have a hotdog stand and want to beat your competition<\/a>, what you need most is a starving crowd. Hormozi uses this example in his book. He says that, to successfully create a lucrative offer, you must choose the right market\u2014one where your ability to meet your customers\u2019 needs, your customers\u2019 ability to afford your product, and growing demand for your product<\/a> intersect. We\u2019ll explore Hormozi\u2019s recommendations for finding an ideal target market. We\u2019ll also explain why it\u2019s better to commit to one market and stick with it, rather than shifting your focus.<\/p>\n\n\n\n

Tap Into Existing & Growing Needs<\/h3>\n\n\n\n

The first recommendation is to search for customers who already have a pressing need for your product<\/strong>. Hormozi explains that this kind of customer will be more inclined to pay higher prices to address their deep desires. <\/p>\n\n\n\n

To find customers with an existing need, you might direct your marketing efforts toward those who have already shown an interest similar to what your product offers. For example, you could target individuals who have subscriptions for other services related to your product or memberships in relevant trade groups.<\/p>\n\n\n\n

Hormozi also recommends that you opt for a market that\u2019s currently expanding, meaning more and more people have a need for your product. An expanding market suggests a sustainable and increasing demand for your product, ensuring that your business has room to grow.<\/strong> Choosing a shrinking market, like selling new film cameras, will make sales<\/a> more challenging as the market trends toward digital photography. <\/p>\n\n\n\n

Tip: Beware of \u201cGrowing Pains\u201d in Business<\/strong>

In The Voltage Effect<\/em><\/a>, economist John List provides several warning signs that a particular market will not scale well, and therefore is not <\/em>a good choice for your new business:

1. A niche market lacking broad appeal<\/a>: <\/strong>Even if a product is popular with its original audience, that doesn\u2019t mean it will appeal to the general public\u2014in such a case, your business won\u2019t be able to grow effectively. For example, Google Glass (Google\u2019s attempt at \u201csmart\u201d glasses) may have been exciting to tech enthusiasts and some businesses, but most people were turned off by the high price tag and privacy concerns<\/a>.

2. Consequences of scale<\/a>: Ideas and products that are successful on a small scale often encounter problems on a larger scale. For example, adding a small amount of lead to gasoline improves engine performance. However, when used on a large scale, the toxic emissions caused physical and mental health problems for people all over the world\u2014this eventually led to a worldwide ban on leaded gasoline<\/a>.

3. Costs increase faster than profits<\/a>: Generally speaking, as you manufacture more of a product, the cost per unit decreases or remains the same. However, that\u2019s not always the case, which can create enormous budget problems as your business grows. For instance, this problem is especially common with companies that try to move to cloud computing<\/a>\u2014the more cloud storage and processing your company uses, the more your costs will increase, often far in excess of what you predicted. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Commit Long-Term<\/h3>\n\n\n\n

Hormozi points out that understanding your market takes time. Therefore, rather than frequently shifting focus<\/a> and wasting time getting to know new markets over and over again, commit to just one market and strive to understand it deeply<\/strong>. Mastery of your chosen market can lay a strong foundation for sustained success by steadily building a base of loyal, paying customers.<\/p>\n\n\n\n

(Shortform note: While devoting your energy to learning and mastering one particular market is a reasonable approach, not everyone agrees with it. For instance, in How to Get Rich<\/em><\/a>, self-made millionaire Felix Dennis argues that you should not <\/em>focus too much on any one particular market or industry, and instead be ready to seize any new opportunity that arises<\/a>. In fact, many companies that are highly successful today have followed Dennis\u2019s approach. For example, Nintendo\u2014now famous for its massive video game franchises like Super Mario Bros.<\/em>\u2014started out manufacturing playing cards<\/a>.)<\/p>\n\n\n\n

Exercise<\/h3>\n\n\n\n
    \n
  1. What\u2019s one customer need that you could design a product to address?\u00a0For instance, perhaps there\u2019s a skill you could teach, a disability challenge you could help with, or a part of daily life you could make easier.<\/li>\n\n\n\n
  2. What will your product do to fulfill that need?<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    What makes a market truly worth pursuing? How can you tell if your chosen market will support sustainable business growth? Finding the right market is crucial for business success. In $100M Offers, Alex Hormozi uses the example of a “starving crowd,” emphasizing the importance of targeting customers with urgent needs and the means to pay for solutions. Continue reading to explore how to identify and commit to a market that will help your business flourish.<\/p>\n","protected":false},"author":9,"featured_media":134541,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,104,103],"tags":[1648],"class_list":["post-134533","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-marketing","category-sales","tag-100m-offers","","tg-column-two"],"yoast_head":"\nA Starving Crowd: How to Find the Right Market (Alex Hormozi) - Shortform Books<\/title>\n<meta name=\"description\" content=\"If you have a hotdog stand and want to beat the competition, you need a starving crowd. 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