A gap in the market offers a supply the opportunity to tap into an unexploited demand. If you find a gap in the market, you have a good chance of building a successful business. But how do you find a gap in the market? Isn’t there already everything immeasurable in the world? And how do you know that a supposed gap is really a gap?
We present strategies that help you find a gap and have examples of success for you.
What exactly is a gap in the market?
Kaiser Wilhelm II believed in the horse and thought that the car was a temporary phenomenon. One of the fathers of computer science, John v. Neumann, said in 1949, “It seems that we have reached the limits of what is possible with computer technology”. Bill Gates still thought in 1981 that 640 KB of memory should be sufficient. And there were similar forecasts for the CD, the smartphone, the TV – and even for oil.
What do these examples have in common? They are all, or were, once market gaps through which billions have been implemented. But they all show that sometimes it is not so obvious to identify a real gap in the market. A gap is characterized in theory by these two characteristics:
- an existing demand
- no corresponding offer
In practice, however, it is not so easy to find a gap. Because how do you know what people are asking for, if they don’t even know that it exists? It is not impossible. Below we present strategies to help you identify a gap.
Strategies to find a real market gap + examples
To find a gap in the market, you can use one of the following strategies. Sometimes, however, a simple Brainstorming or a mind map or some market analysis will reveal a gap.
#1 Painspotting: Take advantage of the customer’s anger
What did you get upset about last time, what did you or a friend miss, what has annoyed you for a long time? From poor service to a faulty product, everyone has probably been outraged by something. This is where your chance to find a real gap in the market begins: how to solve these annoyances? There is often a need for improvement in your own job, hobby or service that you use yourself. The best conditions for you to close a gap in the market. Of course, you should have the industry know-how you need and know your target group exactly.
- For example: There are not many half-time jobs, but young mothers, for example, are in high demand for them. The founders of Tandemploy developed the first job-sharing platform.
#2 Copy-Cat: Controversial but successful
Copy to find a gap in the market? Yes, exactly! The strategy is simple: walk around the world with your eyes open – and quite literally. Even one or the other business idea originated on a trip. Certainly, there are already successful business models on the other side of the world, which represent a real gap in the market. Let yourself be inspired by international business ideas and try to test problems that you encounter in everyday life for a possible market potential. The copy-cat strategy is controversial in the start-up world. The main advantage, however, is that the feasibility of the idea has already been proven.
- For example: Zalando is one of many examples from Rocket Internet, which is considered a copy cat. The company is strongly oriented towards the American success model Zappos. Certainly a point of appeal for criticism, but Zalando is very successful.
#3 Blue Ocean Strategy: Exploring Untouched Fields
The “blue ocean” is characterized by dodging competition and opening up a new demand. In other words, you are creating a new market that your customers did not yet know. The first car was also built one day, the first smartphone and the first computer. Here, of course, are real innovations but you can also change small aspects of products that were previously unthinkable. Anyone who knew the car in 1886 would not be able to believe his eyes if he were to see a self-driving car today.
- For example: Because the daughter of the ReMoD founder was paralyzed from birth, she developed a device that protected her from the wheelchair.
#4 Gap in the market with the positioning cross
A positioning cross (see example above) can also help to find a gap in the market. You create a cross that identifies the performance characteristics of the corresponding market. For example, in the case of detergents, a distinction is made mainly between “white” or “coloured” as well as “gentle” or “powerful”.
Your task now is to sort existing products on this cross. Product positioning makes it relatively easy to see where there is still a gap in the market and where you would move compared to your competitors. However, then check if there is a reason why the corresponding gap in the market is not yet filled. It is not always a real way to exploit an obvious gap.
Market gap found: These are your next steps
If you have discovered a supposed gap in the market, you should conduct a thorough search to see if the gap is really a gap – and whether there is a reason why this gap has not yet been tapped. To do this, check the customer benefit and make a detailed Competitive and market analysis.
Also start some Research to check whether target customers would in principle be willing to buy the product or to use the service. Existing market studies, data from industry associations as well as own test runs or surveys help. Also, define the current market size. The potential market growth in the next few years, as well as the market potential – that is, the maximum that your market could reach.
Conclusion: Finding a gap in the market is not easy, but it is not impossible
There are many gaps in the market, but sometimes they are difficult to identify – after all, they are not yet known in case of doubt. For example, there has already been speculation about whether these innovations are marketable at all, with innovations such as cars or smartphones.
A gap in the market is characterised by an existing demand for a supply that does not yet exist. To find a gap in the market, various tools and methods are suitable, such as Painspotting, the Copy Cat method or the Blue Ocean strategy. Even that of us developed positioning tool helps you identify a gap in the market.
If you have found a gap in the market, it is crucial to Market and competition-analyse in detail, as well as define a corporate strategy. Because sometimes there is a good reason why a gap in the market has not been filled by an idea similar to yours.
Finally, good news: if you manage to build a business on the basis of a gap in the market, you can temporarily create a whole monopoly. But beware: as a rule, other manufacturers follow suit, so that even if you have found a gap in the market, you should not rest on it, but use your knowledge advantage to keep up with the market in the long term.