Links and resources

• WhereToPlay.co – The official website offering free downloadable worksheets, case studies, how-to articles, webinars, and other resources supporting the Market Opportunity Navigator.
• Where to Play book: The book that lays out Sharon Tal’s approach

Interview Transcript

Shubha K. Chakravarthy: Hello Sharon. Welcome to Invisible Ink. We’re so happy to have you here today.

Sharon Tal: Thank you very much. I’m very happy to be here with you Shubha.

Shubha K. Chakravarthy: So I’m super excited about this conversation. I’ll tell you that I’ve been spending a lot of time working through the Where to Play framework for my own startup and it has been an eye-opening exercise. So I’m really excited about getting into this conversation. So just to kick us off, can you tell us a little bit about your work and what led you to create this framework?

Sharon Tal: Yeah, sure. Actually, I’ve been working with startups for over 20 years now. I started my journey with early stage founders when I co-founded the entrepreneurship center at the Technion, the Israel Institute of Technology. And I was the executive director of this center for many years.

And when we mentored these bright founders, they typically come with a super interesting invention or technology but many times they had a common challenge. It was a technology that could bring value to different types of customers. So we had to figure out how to help them find the best or the most attractive market opportunity.

And I started to see this happening again and again. And because I came from a marketing background, I thought this is such an interesting topic. Maybe I should research this more deeply. And I decided to do my PhD study on early market entry decision of startups.

And then together with one of my supervisors, Professor Mark Gruber, once we finished the studies we realized that we have so many insights not just for developing the theory or for theoretical contribution but also for practitioners. So we just had to make this leap from the theoretical world to practitioners and create something that would help them figure out how to discover the best market for their innovation.

The Where to Play Framework

Shubha K. Chakravarthy: Which brings us to the book and the actual framework. So for those of us who are not familiar, can you just give us a very brief overview of what exactly is it and what is it meant to do?

Sharon Tal: Sure. So, if you think about an innovation that could bring value to different types of customers or actually be the baseline for even different types of offering, the very first thing you need to do to find your best market is to understand your landscape of opportunities. Where can this bring value? Who might need this?

The second question you need to figure out is, among these options which one is more or less promising for us? And then finally, the third question is, all right, how do we now prioritize, take this understanding, and develop a roadmap with the right focus? And this is exactly what “Where to Play” the framework is all about.

We actually call the framework the Market Opportunity Navigator, and it includes three steps that address these three questions. So, step number one is about generating your set of market opportunities — really understanding your landscape of opportunities.

Step number two is about evaluating them in a systematic manner so you can compare different directions. And step number three is about generating a strategic focus or a smart strategic focus, prioritizing these market opportunities in a way that would increase your chances of success. So, there are three steps for this framework and three dedicated worksheets that guide you through the process.

Shubha K. Chakravarthy: I like what you mentioned about market opportunity and this may sound a little trite. So, markets are everything. I come also from an investor’s mindset but can you talk from a research standpoint, are there specific outcomes that you’ve seen that differentiate startups that have taken a conscious and deliberate market opportunity selection approach versus those that just stumbled into it? I understand that it’s important. I’m just trying to understand tangibly, what are the differences?

Importance of Market Need

Sharon Tal: Right, yeah. So here is an interesting insight that was from a research that was done by a company called CB Insights. They actually looked at 101 startups that failed, that ceased operation. And they asked the founders, now that you have closed your startup, can you share with us why?

And it turned out that the number one reason for startup failure is no market need. And that was mentioned by 42% of the failed founders. So here is a very concrete answer to you about what it means to fail or to make a wrong decision about market opportunities. And in fact, the decision of which market we want we should be focusing on really is not just shaping our chances of success.

I mean with generating more or less revenues, et cetera, it’s actually an imprinting effect. It really shapes the DNA of the venture you are currently building. So think about so many aspects of the venture that really depend on the market and your offering and the market that you will be addressing, even like the brand name or the reputation that you build, the structure, and the culture.

And these are elements that are difficult to undo down the road. So the decision is critical, not just because it shapes the chances of success but because it shapes the DNA also of the venture.

Shubha K. Chakravarthy: I love both of the points you made, and I’m familiar with the CB Insights research. And what’s interesting to me in what you said was that these 42% of firms said that there is no market need. But that presupposes which is what we’ll get into, is that you have a technology that could have found a market somewhere else which is the whole point of what we’re talking about.

So I want to kind of narrow it down to  STEM/ deep tech type areas, because that’s where you have like, essentially a solution that’s looking for a problem, if you put it in a different way.

Common Mistakes by Founders

Shubha K. Chakravarthy: So can you talk a little bit about, you mentioned all the inventors that you work with. What are some common missteps that you see STEM and deep tech founders taking when they’re trying to enter a new market?

Sharon Tal: Right. So first let me just mention something I don’t like so much: the phrase here, “solution looking for a market,” because it all seems like a wrong thing, but it’s actually not a wrong or a problematic path. The reason for that is that, to have a good business opportunity, you need to find a match between a clear market need and an innovative or novel solution to address this need.

And the fact that we have an invention or innovation still doesn’t mean that we are not going to do this whole search for a clear market need and a unique novel solution to address this need. So I’m a bit reluctant with “solution looking for a problem” because it always sounds bad but it’s definitely fine to start a company based on a unique set of competencies. You just need to run the journey of understanding and finding your product-market fit. So that’s just a little comment before we move on.

And then about your question on typical mistakes: So the first and most common mistake that many people talk about is founders falling in love with their initial idea. Never just stopping to look around and see if there’s anything else in store for them that might be more promising.

And then some startups do see some market opportunities but tend to choose their focus based on an incomplete set of considerations. For example, a customer knocking on your door asking you, “Hey, we heard you have this cool technology, can you do XY for us?” And then, all of a sudden, “Oh, there is a customer here interested in my thing. I would definitely go into this direction.” So making this critical decision based on an incomplete set of considerations.

And then finally, another typical mistake is just not making a decision and juggling with too many opportunities in the air which makes sense sometimes because you want to stay flexible but it turns out that you cannot really progress because you just slice your resources too thinly here.

So that’s another common mistake. Bottom line: you have to make a choice. You have to make a decision. But we want to make it an informed decision as much as possible and also prepare ourselves to adapt and change if the future would require us to do so.

Shubha K. Chakravarthy: I love it. So the falling in love with the solution, I get that. But I’m very curious about the second flaw, which you mentioned. And it’s just like, hey, a customer knocks on a door. So help me out with that,  Like we’re all told that, look, a bird in hand is worth two in the bush. Don’t go chasing after some theoretical thing.

And we know the PayPal story, we know the Flickr story, we know all these stories,  Basically, PayPal did exactly what you said was a flaw which is they said, “Hey, customers were knocking on our door and they wanted this web app,” and we said, “We don’t want to deal with it. Go away.” And things like this.

Sharon Tal: Yeah, so that’s the other,  So you’re looking here at another outlier,  I mean, I would probably say both are problematic. Like, don’t ignore customers that knock on your door. But, on the other hand, just the fact that one customer is knocking on your door still doesn’t mean that it’s an attractive opportunity.

My point is, if customers are knocking on your door, that’s fabulous. That’s great. Just make right research to figure out if it is an attractive opportunity.Try to make it an informed decision. One that is based on a complete set of consideration because it’s a critical decision to make. And many times also, we see intuition here playing a big role, or just my opinion versus your opinion. And that’s also problematic. Don’t base this just on intuition. Bring the right evidence and data to base your strategic decision here.

Shubha K. Chakravarthy: Got it. So I like what you said,  There’s a golden middle in which you’re not going too far in either direction, and this word keeps coming up over and over again,  Opportunity which is a right opportunity. I can tell you an opportunity is X.

Sharon Tal: Yeah, I have.

Defining Market Opportunities

Shubha K. Chakravarthy: Do you have a specific way in which you define an opportunity, and are there good and bad ways in which a founder might define an opportunity?

Sharon Tal: Yeah. Great question. So the basic definition of a market opportunity is an application. Something that stems from your core competencies or unique set of abilities that address the need of a specific set of customers. So it’s kind of a combination of what is it that we are offering and for whom. But the two main elements you need to understand before you start the analysis and the learning is, how do we define this opportunity in terms of what we offer and for whom?

Now, what we see many times happen is that this definition is not well stated or not clearly stated. For example, we have this predictive maintenance solutions for industrial machineries. That’s nice, that’s great. But what type of industrial machineries? Who exactly are the customers or where would you find your customers? So defining it too broadly is one of the major mistakes here we need to keep in mind. And there’s a very well-known saying in marketing: one size fits no one.

And many times founders think that if it’s the very same technology or the very same offering, why not just open it to anyone that would find it valuable? And the reason is because you have to be very specific on your target market. Who is it that you’re addressing? What would exactly motivate them to use you? What’s the set of competitors out there that they could use alternatively, etc.? So you need to find a way to tailor your solution to fit exactly to the needs and wants of specific customers.

We need to keep in mind when you define a market opportunity: what do you offer? What is the application that you are bringing and to whom it would bring value? And then you can actually think about different applications and different customers and create a set of market opportunities.

Shubha K. Chakravarthy: So essentially what I’m hearing you say is that an opportunity equals some specific subset of your capabilities that are bundled into a specific application which delivers some kind of value to some very specific customer. Is that like, are those three?

Sharon Tal: It doesn’t have to be a part of your specific, of your core abilities or unique know-how. It could be the whole thing but it could also be based on part of your unique capabilities. In other words, how do you leverage this unique technology or know-how or features that you are developing to create different offerings or address the need of different types of customers?

Shubha K. Chakravarthy: So I want to dig into that a little bit in terms, especially of capabilities,  And it’s fresh in my mind because I did the same thing for myself and I try to do it for a few of the deep tech founders that I work with. When you think about capabilities, let’s take, there’s some technology.

I’ll just pick clean tech because I’m familiar with it. There’s a clean tech technology. It can do a bunch of things. So, for example, it can essentially absorb carbon dioxide and transform it into something less polluting to the atmosphere. It can produce new outputs and byproducts. So it can do so many different things.

So I’m sitting here as an inventor, and then I get excited because, oh, I can do this. I can produce these sustainable fuels. I can decarbonize steel production. I can do X, Y, Z. So, first of all, how do you start reducing those into a bucket of capabilities? And secondly, there are second-order capabilities. So let’s say you generate a whole bunch of data doing what you’re doing. So there’s a whole analytics layer where you can mine that data and say, I can do all of these other things.

Here’s another example. Maybe you build a specific interface for a specific industry to use your technology. Is that interface a capability? Like, is there like a hierarchy of which is like the most like primary capability, second? So help me understand.

Sharon Tal: All right, I understand you. Okay. So first, before we dive into types of capabilities, maybe let’s just put it in the right context, okay? So the first step of the Market Opportunity Navigator is about really generating a set of market opportunities. So we want to help the managers, the founders, the innovators to see a wide or a broad set of applications and customers.

That’s the goal. One way to do that is with starting with your innovation and thinking about the core elements of this innovation in its own right. And then once it’s out there, like building blocks on the table, you can combine or recombine these elements in different ways to come up with different applications and customers.

So I just wanted to put the context here. We call this process the de-linking and re-linking. We de-link our idea into core elements or unique features and then we re-link them back to generate different applications that may address the need of different types of customers.

All right. Now, your question about how do we actually define capabilities is a very good one. And in effect, I don’t think there’s really a right or wrong way here. What we want to keep in mind is that this process of defining the capabilities is a means to an end. It’s a means to help us develop this cognitive flexibility to air our initial ideas and see more things or help others help us see more things.

So defining the core capabilities or core competencies in their own right is really just a step here to develop this cognitive flexibility. And let me tell you something. If you are a team that’s been working on your idea, I don’t know, for several months now. And I would give you this exercise and each one would sit separately and write down the core capabilities, detach from the envision product they have in mind just on their own right.

It would probably look a bit different. Each one would probably. Do it in a little bit, in a different way, So what’s a capability? It could be a unique technological element or feature. It could be something that we know how to do, like, we have the know-how on DNA sequencing and we know how to take huge samples and test them very quickly by DNA sequencing. So it’s a know-how that we have, or we might have a unique asset, like a data set that you mentioned before,

So any asset that is unique and brings us some kind of advantage could also be a core competence. I’m just going back to your example and funny enough, I just worked with a company very similar just a few days ago. So if you can on one hand capture CO2, that’s one competence. And then in the process you create something like a mineral, for example, that could be another  competence. And then during this process you also provide some advantage to the production line or whatever. That could be another, so it’s fine.

I mean, you don’t need to be selective here. You can really just describe, characterize these unique elements that you bring to the table and explain their functions, the properties and also their limitations,  Like for example, if this CO2 capturing technology only works under specific conditions, then write down this limitation. Because as I mentioned, it’s a mean to help us see more applications, but we also need to understand if there are things that this technology cannot do.

Shubha K. Chakravarthy: So basically what I’m hearing you say and tell me if I understood you correctly, is first of all, there’s no limitation. Be expansive because that’s the whole point. And then secondly, can I try to work through how this works in real life? And then identify what are the components, whether it’s process knowledge, whether it’s an asset you use, or a specific invention you bring to the table. And that’s okay. Got that. So now you have maybe 10, 15. Is there a limit to the number of capabilities you need,

Sharon Tal: Yeah. No, I mean, I think you went very big here. Typically, I would say it’s somewhere between three to ten. Not more than that. It’s difficult to work even with ten but if it helps, that’s fine. Like it doesn’t have to be. There’s also a question of the granularity here.

In reality, when we decompose our idea into its core components, it’s also a question of how refined we define the competencies. So again, I always say there’s no right or wrong way here as long as it helps you to see or develop this cognitive flexibility.

Shubha K. Chakravarthy: One quick question here is: when you’re the inventor and I’ve seen this. Sometimes they tend to get fixated on the one thing. You mentioned this earlier yourself. It’s like one specific application, one specific part of that process or invention that they like to the exclusion of others.

How can they prevent, take these blinders off and make sure they’re exercising that cognitive flexibility that you talked about?

Sharon Tal: Yes. So I think this delinking process is valuable because of two broad reasons. First, once you see your building blocks on the table, you might realize that hey, maybe one or two of them are interesting in their own right,  We don’t need a whole bundle.

For example, we had this team that was working on an algorithm to help radiologists read brain CT scans in an automatic manner. And one feature that they have developed is the what they call noise reduction element to increase the quality of the image before it goes into their algorithm. And suddenly, once they did this exercise, they realized that this noise reduction element is actually interesting in its own right because you can now bring it as an add-on, maybe to existing CT scanners, lower the radiation and produce the same level of image quality.

So breaking your technology or invention into its components helps you, first, to see that you don’t necessarily need all the elements or maybe you need another one that you currently don’t have that might open up completely new directions for you.

So that’s one thing. And the second thing with this blind spot that you mentioned is, look, it’s really very natural to have blind spots because we only see what we see. We only know what we know. So if we have a prior experience in some area, industry, we would typically see ideas coming from that.

The way to overcome this blindness is to involve other people in the discovery process. But to involve other people in the discovery process, you really need to explain them in a simple way what is it that you have on the table.

And you want to explain it to them, detached from the envisioned product that you have in mind, because you want them to come up with applications and customers. So by doing this exercise, you don’t just develop your own cognitive flexibility, you can also rely on others in this discovery process. And that is really powerful.

For example, when I work with founders, we do these round table discovery sessions. We bring different people to the table with different prior experience, different backgrounds and we really help the founders see applications or targets or use cases if you want, that they haven’t thought of before.

And lastly, I would say, just because you’d mentioned blindness, how do you make this discovery process more effective? We recently also see a lot of value in using LLM or chatbots. You can rely on GPT or any other LLM chatbot you are using because they have a 360-degree view of the world. It’s like another teammate with a super broad view but you want to prompt them properly.

So how do you prompt them properly? You explain the core competencies that you are developing, even if they’re not ready yet but what is it that you will be developing and then ask chatbot, “What can we do with this? Who may need this?”

Now, this semi-structured discovery process helps you air your own cognitive limitations but also allows you to rely on others in this identification. And the goal at the end is to have a broad set of market opportunities that you want to further explore. And if you can find some variance between these market opportunities, that’s great. It’s not always the case, but it’s great.

Shubha K. Chakravarthy: Just one last question on the market opportunities. We talked extensively about capabilities and use cases, and we know we talked about applications and applicable to specific customer segments as a key step in identifying market opportunities.

Can you talk about how a founder can come up with like different enough applications? Should they be different? Or like, what is the guiding rule there for generating and give me some examples? That’d be great.

Sharon Tal: Okay. It really depends. I mean, sometimes you are developing a very contextual technology. Like a medicine for a specific cancer that’s highly contextual. So you don’t have to force it. But I would actually encourage even this type of founders to say, “Alright, what is this medical procedure based on?”

It’s like maybe a unique RNA processing, maybe a unique delivery system, maybe, I don’t know, some understanding of how biological molecules can help us do something. And then once you put this as your core capabilities here, you might realize that this could be a medical treatment for this specific cancer that you had in mind but it might also bring value in other types of cancers or maybe in other types of medical conditions.

I would never urge someone like this to say, “Alright, what else can you do beyond medical applications?” because it doesn’t make sense at all. But on the other hand, sometimes, imagine you are developing a sensing patch — a very high-resolution sensing patch which is very easy to print, affordable, highly accurate.

This could really bring value in so many domains, starting from actual medical applications but also rehabilitation and gaming and industry, and whatnot, robotics and machineries, etc.

So here, you can really think about a very broad set of applications, and then the customers that may need it.  So I would say, I always encourage founders to take a step back try to see really the broad landscape of opportunities. It still doesn’t mean that they really need to explore all of them or really research all of them.

You then choose those that you select like 2, 3, 4, 5 ideas that you want to further explore and they could be far away from each other but they could also be relatively related or close.

Shubha K. Chakravarthy: So basically what I’m hearing is when you have these set of market opportunities which is, hey, I’m going to give, for example, taking the sensor patch one market opportunity is sensor patch for health, for medical conditions. One is sensor patch — I just make this up — for sensitive industrial equipment.

Sharon Tal:  That’s an application. Just before you continue your question, this example is the application. What can you do with this patch, and then who may need it? So, like for example, patch for medical diagnostics whatever or treatment. I don’t know, could be the application. Now you can think about maybe a cardiologist who may need a super sensitive device, maybe, I don’t know, gynecologist, et cetera. And then these combinations are what create your market opportunities.

Shubha K. Chakravarthy: So then now you have potentially like five or ten with just two applications, you might generate ten market opportunities because each of them is applicable to all of these sub-segments of customers. So what I’m hearing you say then, extending what you just said before, is I have this list of, let’s say, ten market opportunities which is application plus customer segment.  And I heard you say use your intuition to kind of boil it down to a much shorter list. Of how many? Like three, four?

Sharon Tal: Yeah, I mean, it depends. Again, it also depends but I typically say use some very basic critical selection criteria. Like do you really believe there’s a real need here,  Can it bring real value here? Or is there anything that may hinder your success?

Like, imagine you don’t want to go into a highly regulated market. One example we have in the book is a caged drone with a camera on top of it that can fly and roll in complex and confined spaces. And this is a Swiss-based startup and they surely had some applications in the military space for defense but they didn’t want to go there which is fine. I mean, it’s legitimate.

You will dedicate your life to it right now, so better be aligned with your values and passion anyway. So use some very rough initial criteria to choose, to select your set of market opportunities that you’re going to further explore. But don’t worry, because anyway, it’s a very iterative process.

So even if you put aside some ideas for now, you might realize down the road that they are maybe still interesting — you bring them back to your set. Or you might realize that those that you have put in your set are actually not so interesting, and you discard them. So anyway, it’s an iterative process. Don’t worry if you left for now some areas which are not fully explored. It’s okay. You need to start somewhere.

Shubha K. Chakravarthy: So it sounds like it helps to have that living repository of ideas and potentially maybe you even add more ideas as you kind of go about in the world and learn more things. Okay, so now fine, through a combination of real-world information, gut sense, and intuition — you boiled it down to three to five market opportunities. What happens next? What do I do next?

Evaluating Market Opportunities

Sharon Tal: Great. So now you need to figure out how attractive these different ideas are. You need to really find a way to systematically evaluate their attractiveness. And this is where the second step of the “Where to Play” process comes in. It’s a process that helps you to assess the overall potential and the overall challenge of each market opportunity, and then map them on this two-by-two matrix that we call the “Attractiveness Map” based on exactly these two dimensions: the overall potential and the overall challenge.

We selected these two dimensions because research on how investors make their investment decisions shows clearly that these are the two main dimensions that they’re looking for: the potential to generate value in this opportunity and the challenges in capturing this value. So an attractive market opportunity is one that has high potential and manageable challenge, if you want.

The key question is, all right, how do we assess the overall challenge and the overall potential? And we are looking here at three key factors that shape the overall potential for a value creation of a market opportunity.

First, is there really a compelling reason to buy? Do the customers see real value in the thing that you are offering to them? And this is, by the way, the first factor you want to explore. Because if there’s no significant value proposition, forget the rest. It’s just not attractive.

Then the second factor that shapes the potential is the size of the market. Is it big enough today or is it expected to grow in the near future? And the third one, the third factor is what we call the economic viability. Is it worthwhile from a business perspective to actually start climbing this mountain? And it’s typically not done with a clear ROI calculation because this is something super difficult to do when we have such an uncertain environment around us. But asking, guiding us with the specific questions that help us to assess the economic viability like: do we have enough margins? Do the customers well-funded to pay the price? Do they have the budget? Would they be stick? So we enjoy recurring revenues, et cetera.

And then once you really look deeply into these three factors — the compelling reason to buy, the market volume, and the economic viability — and you bring the right data and the right evidence to support your assessment, then you can use this to score the overall potential. So it’s really different than intuition or opinion. It’s really a set of considerations that you put on the table and you can discuss and debate and hear different perspectives and make an assessment.

Assessing Challenges: Key Factors

Shubha K. Chakravarthy: Got it. So you walked us through a really specific tangible set of questions on the potential side, so how do I assess challenges?

Sharon Tal: Right, exactly the same but different factors. Here we again look at three key factors. The first one is implementation obstacle: how difficult it would be to actually develop the product or the service, how difficult it would be to access the market, and how difficult it would be to raise funding for this idea or seed funding at least.

Then the second factor is time to revenue, which is somewhat overlapping to the implementation obstacle I just mentioned. But it does look at things from a different angle, and a very important angle for the founders because I always say that money for founders is like oxygen for human beings. At the beginning, we need someone to put a mask around us so we can breathe but the sooner we can breathe on our own, the less risky or challenging this opportunity is.

So we look at the time element in its own, how much time will it take until money will start flowing in and not just flowing out? And again, it’s a question not just of how long it will take you to develop your offering but is the market ready for your innovation? Would you need to wait? What’s the typical sales cycle in this area or domain, et cetera.

And the last factor, the third one is the risk in the business environment. So these are things that you really don’t control but may hinder your success. For example, the threat by competitors or your dependencies on other third parties like regulators or other value chain members, barriers to adoption, et cetera. And again, the process is very similar to what I described in the potential side.

You really go through each factor you find or try to find the right data, the right evidence to support your understanding. You summarize this on this qualitative scale on the worksheet and that helps you to assess the overall challenges, capturing the value for a specific market opportunity. And once you do this in a systematic manner, you can actually compare oranges to apples.  So you can take different market opportunities from different domains and different applications and put them together on this map because you made the process very structured, the assessment.

Balancing Risk and Reward

Shubha K. Chakravarthy: So two questions on that. I love how you walked through that. The first is: you talked about implementation challenges, sales cycle. In many cases, when we are working with new inventions, there is no such product in the market,

So I don’t know how long it’s going to take for a steel manufacturer to adopt my process or some hospital system to take this entirely new AI-assisted whatever.  How do I come up with factual, evidence-based assessments rather than just making stuff up and favoring the idea that secretly I want to pursue? Any ideas on that?

Sharon Tal: Okay, it’s a good question. Let me tell you a few things here. First, this whole worksheet and this whole evaluation process is to put a mirror in front of your face. It’s not for you to put on the piece of paper what you think is right; it’s really to help you challenge your prior assumptions and make sure you are basing your assessment not just on intuition or what you think is true about this market.

And the fact that you have a worksheet that you can actually put on the table means that you can air your biases because you can invite other people to the process. You can hear different perspectives. It’s not just my opinion versus your opinion. It’s really: let’s discuss this, these concerns, these questions.

It’s understanding if we have different perspectives—why do we have different perspectives, etc. So yeah, we want to make it as objective as possible. And the fact that we now have a set of questions to ask, and that we can bring other people to help us assess, is really helpful with this thing. It doesn’t solve it, but it’s helpful.

Shubha K. Chakravarthy: I love that.

Sharon Tal: And now, but I want to answer your second part of your question about what happens when it’s a completely new, groundbreaking thing. Something that we don’t know how people would react. And then you are completely right. We can look at comparables, look at how people react rather than what they tell you they would do, etc.

But it’s still kind of a guesstimation. However, here’s the thing: it’s not just about the absolute scoring; it’s a relative scoring. Here, you run this process not just to maybe understand one direction in itself but to understand how they are relative to each other. So if you have an idea which is very fuzzy, it’s very difficult to understand the overall potential and the overall challenges because it’s such a new-to-the-world thing.

And on the other hand, you have something more concrete, easier to understand so you can now just understand this better and you can understand how they are relative to each other, and just confront this and decide. Again, it doesn’t mean that you always need to go with the safe bet but it just means that you understand the key risks and uncertainties with this breakthrough idea, etc.

Shubha K. Chakravarthy: Got it. So in evaluating each of these things, the challenge is the potential. It sounds like you could do a whole bunch of like what I’ll call field work—going and talking to customers—and it feels very time-consuming. Not to say that it’s wrong, but then time is the most important resource for a founder. What’s the balance?

Sharon Tal: Let me start by saying it’s time worth spending, because this is a critical decision.  Common myth in startups that people always say: you have to focus from day one, focus from day one. But it’s a myth. The reason it’s a myth is because you need to take the time to figure out where to start focusing. So it’s not from day one. And you need to take the time, and you want to talk with potential users or potential customers, and you need to figure out this—what’s the downsides and upsides of your different directions, etc.

And at some point you will feel confident enough, meaning even if you don’t have all the bits and bytes of information, you have this somewhat clear understanding of what’s the main upsides and the main downsides of your different directions. And that’s good enough to make a decision. It’s not an easy decision anyway and there’s always some stomach ache here. But my recommendation here is: stop when you feel that you’ve heard things over and over again.

We also need to understand there are some uncertainties. There are known unknowns and there are unknown unknowns. And that’s what innovation is all about. And we can leverage this landscape of opportunities to help us prepare for this future adaptation and change if necessary. So that’s actually the third step of the market opportunity.

Shubha K. Chakravarthy: We’ll come to but we are not there yet because so far what we’ve done is we picked the five opportunities that we talked about earlier, and now we’ve just gone through this fact-based approach of assessing potential and challenges. So I love that because as an investor, I think risk and reward and those map reward. So I have some that are high risk, high reward; high risk, low reward; whatever the case might be. I have a ranking—admittedly it’s qualitative, not quantitative.

Sharon Tal: True.

Shubha K. Chakravarthy: How do I pick? Like, ideally I have something that’s amazingly high reward and very low risk, but in real life I’ve not seen those. How do you make those trade-offs, and how do you make that choice?

The Attractiveness Map: Evaluating Opportunities

Sharon Tal: So, we have this tool we call the attractiveness map that helps you see your contents from a bird’s eye perspective. What does it mean? Once you assess the overall potential and challenge of your different market opportunities, you map them on the scale of overall potential and overall challenge. And it’s a two-by-two matrix and just like any good two-by-two matrix, it creates four types of opportunities, or it distinguishes between four quadrants.

So, we have the gold mine opportunities with these high potential and limited challenge, which you mentioned that you hardly see, but I see from time to time, you should know. Then we have these moonshot ideas. This is exactly the high-risk, high-return that you mentioned before. High potential, high challenge type of ideas. Many STEM ideas fall into this quadrant.

And then we have the quick wins which are modest potential and also modest challenge. Think about this as a lower-hanging fruit for the company. They could be interesting in their own right, depending on the objective of the founders but they could also be an excellent stepping stone. So, you might start with a quick win on your way to a more challenging opportunity later on.

And then, lastly we also have the questionable ideas with a modest potential but a lot of sweat, tears, and money to actually fulfill. And these are the ones that we want to reconsider actually and maybe think again. There’s no right or wrong way in picking or selecting the one that you’ll be focusing on.

Of course, if you have goldmine ideas, that’s excellent. These are very attractive. But many times, we see opportunities spread across the diagonal these low-risk, low-return, high-risk, high-return type of ideas. And you can start anywhere on the diagonal, depending on your tendency to take risks, depending on how confident you feel.

Shubha K. Chakravarthy: That was money. Yeah.

Sharon Tal: Money, how much resources you have, what your stakeholders tell you. Just an anecdote. Many times when I run my sessions, I show a picture. I show participants a picture of mountains and there’s like a very low mountain, a mid-mountain, and a high mountain.

And I ask them like, you have to choose your market opportunity. Assuming market opportunities were mountains around you, which one would you choose? And it’s always super interesting to hear because there’s always a diverse answer. People tell me, “Of course I would start with the lower one just to make sure I can climb something.” And other people say, “If I started this journey already, I would definitely go for the highest one,” etc.

So, there’s a lot of issues around the founders themselves and how they choose the low-risk, low-return or high-risk, high-return type of ideas to begin with. By the way, my point when I show them the mountains is not whether they want to start with the smaller one or the higher one because then I take a step back and I show them a wider perspective of this mountain analogy and there are many other mountains around them.

So, it’s actually about seeing the bigger picture. If you want the lower one, it’s actually maybe this one and not that one, etc. So that’s my point when I show them the mountain. But it’s always fascinating to see how different entrepreneurs have different inclinations about risk and return.

Shubha K. Chakravarthy: So, is this the point where you talk about the founder-market fit? So, what’s a good market for someone may not be a good market for another one, because you’re talking about two very different founders with two very different backgrounds?

Sharon Tal: Right. Yeah. So, I think whenever we talk about how do we go from this attractiveness map and the bird’s eye perspective into a clear strategic focus, I always say the map is like a kind of an objective scoring of the potential and challenge.

But on top of it, you think about other layers that you can add when you make your decision. And the founder’s passion, values, etc., is one layer that you can put on it and your tendency to take risk, or the resources that you have, or the interest of your stakeholders. So, there are things you don’t see really in the map like when you assess the overall potential and challenge but also may shape your strategic decision on where you will start building your business.

Shubha K. Chakravarthy: One last question on that. Clearly everybody wants gold mines. And if you don’t have gold mines, are there things you can do to make some opportunities more attractive than they are otherwise?

Sharon Tal: So, I think the scoring, the assessment of the overall potential and overall challenge is not written in stone. You can actually use this assessment to see where the weaknesses are and try to figure out if there’s anything you can do to improve them.

So, on the potential side, maybe sub-segment the market in a different way to increase the compelling reason to buy or the overall market volume. On the challenge side, maybe find a partner that can share the challenges with you and lower the risks. So, it’s not that all the downsides could be actually reshaped but sometimes you can. And just by mapping out and scoring these different factors that shape the potential and challenge, it helps you to see what are the weaknesses that you can maybe try to reshape.

Shubha K. Chakravarthy: Got it. So now I have these five opportunities, we map them and then I’ve got them on the grid. Let’s say I’ve got one that I think I’m going to go with. So, do I just now go and implement? What happens next?

Sharon Tal: So first, it doesn’t have to be five. We are just talking like five market opportunities could be less or more. But I would say somewhere between three to five is a good starting point to make the most out of your evaluation process.

Prioritizing Market Opportunities

Sharon Tal: And it brings us to the third step of the Market Opportunity Navigator, a step that we call the Agile Focus Strategy. And this is based on outcomes from our research, it turns out that a good strategic focus is not just about where to find the most promising idea but it’s also about leveraging other directions in our favor meaning maintaining our agility and adaptability in case we hit the wall or in case we need to adapt and change.

The way we recommend founders to go from evaluation to prioritization is to figure out which one is most attractive to begin with. And then build this portfolio of other directions that you want to keep open, maybe for a backup if you’re not successful with your primary market, maybe for growth if you are successful with your primary market. You want to keep them open so that you are able to move into them in the future in an easier manner. And that’s why we call this the Agile Focus Strategy.

And by the way, you also want to say no to some directions. So, saying no to some ideas, it’s also sometimes not easy. In fact, it was Steve Jobs that mentioned that the hardest thing about focusing is not saying yes — it’s actually saying no. But it’s something you need to do.

So, this idea of the Agile Focus Strategy is figuring out what you’ll be pursuing now with your full force, what are some selected options that you just keep open, and which ones you place in storage. And let me just explain one thing about keeping options open: what it means  because sometimes it’s not that intuitive.

So, I think about options in finance,  Options in finance mean – you know better than I do, of course- means that you invest something now only to be able to invest more in the future if you desire to do so. And this is exactly what keeping options open in strategy means. We call this real options. You make a small investment now in these ideas or directions that you want to keep open just to make sure you don’t lock yourself out of them. So, in the future, if you desire to go there, it would be easier for you to do that. That’s the whole idea.

Shubha K. Chakravarthy: Are there examples of things that would represent building a real option that you think are broadly applicable? Like what?

Sharon Tal: So first, what is a good candidate for a backup or growth option? Once we set up our strategic, our primary market our primary focus, think about what we call related market opportunities — ones that are somewhat synergetic, that share the same resources, networks, and capabilities that you are already developing so you can leverage them in the other directions as well.

And there are relatednesses in terms of the product and relatedness in terms of the customers and how close the customers are. So, you want to find a set of related market opportunities that you can keep open. And once they are related or synergetic in a way, it’s easier to also keep them open, and it’s easier to move into them in the future.

What does it mean from a practical perspective? Let’s say you invest 80% of your time on your primary focus, you don’t want to defocus here. It’s not about defocusing. You invest most of your time on your primary market, but think about this 10–20% of your time that you just invest to make sure these other directions are still open for you.

For example, you build your technology in a more modular manner. You build your reputation and brand name in a way that would allow you to change direction. You gather the people around you — the employees, the stakeholders — in a way that would allow you to move into these other directions that you keep open.

It’s really about having a foresight on where you could go next helps you to bake agility into the DNA of your venture but with a small investment. So, you can still focus and put most of your efforts into your primary market.

Shubha K. Chakravarthy: Awesome. So now I have a clear picture. I have a primary focus. You helped me figure out a backup and potentially a growth option, and now I’m being smart about even whether I go about how I build this product or which customer relationships I build. I’m keeping these optionality bets in the background, but I still have to go out. I still have to make decisions on things like brand name. I have to communicate with investors.

Communicating Flexibility to Investors

Shubha K. Chakravarthy: Is there a way that I can communicate to integrate this flexibility and allow me the breathing room to move later that you’ve seen work better? And what should I avoid as a founder?

Sharon Tal: Yep. We need to keep in mind that the Market Opportunity Navigator is one tool in a set of important tools for founders. So once you run through this where-to-play process and you figure out your primary market, you still need to go further explore and validate it for example, with lean experimentations, et cetera, and also validate your business model. But it at least helps you to do this deeper research in boundaries that are well-defined and properly selected.

Then, once you have this clear vision on what it is that you’ll be focusing on and where you could go next, think about how important it is for you when you build your vision, your mission statement, when you think about your partners, strategic partners, how you write your patents even, and the claims in the patents, if relevant.

So there are many aspects in the way you build your venture and the story you tell about your venture that are influenced by having this foresight. An example of a mistake is a brand name that is not broad enough so it locks you into a very specific, narrow path and you are not able to then grow or change direction. There’s an Israeli company called Get Taxi. Originally, they were called Get Taxi, a bit similar to Uber. But at some point, they realized that, hey, this network of drivers and cars that they have built could actually bring other things from point A to B and not just people. But Get Taxi is a brand name that has a specific implication in mind.

So they had to invest a lot in changing the brand name into Get, just so that they can grow now into, I don’t know, deliveries, et cetera.  And if you’re asking about how to tell this story to investors, actually, it turns out investors want to bet on a specific opportunity. They don’t want to hear that you have five different options. Forget it,  I see you nodding. They want to bet on a specific market opportunity, and they want you to convince them that this is a promising market opportunity.

However, they do want to see that you have some maneuverability options that how to de-risk your process and mitigate the risk in case your primary market is, or your primary opportunity turns out to be disappointing. So what you want to show investors is: here is A — we are going to focus on that but we also have B, C, and D to mitigate the risk and maintain our maneuverability or our flexibility.

Shubha K. Chakravarthy: Speaking only for myself, I mean, that would make a lot of sense to me, because it’s not just, oh, we’re just going to throw a dart at the dartboard and then we’ll go figure out these five other things. To me, at least as an investor, it would make much more sense and make me much more comfortable if you told me that the reason I have these as my backup options is because I’m already leveraging these markets or these product capabilities that I bring to the table.

Key Takeaways for STEM and Deep Tech Founders

Shubha K. Chakravarthy: So you’ve already talked about a bunch of things I want to talk about. There’s one thing in particular that I want to ask you, which is, if there’s — from a STEM and a deep tech perspective can you boil this down to like three actionable takeaways for especially STEM and deep tech founders.

Sharon Tal: Yeah. I think with founders that are coming from the science or engineering domains, there’s a bit of a shift in mindset here. The entrepreneurial journey is not about the technology, it’s about the customers. And you really need to adopt this, like this mindset. It’s a major difference. I work a lot with researchers and it’s really the key difference you’re not solving a problem for the science; you’re solving a problem for the customer. Now, once you have this mindset in mind the where-to-play process — I think the three key takeaways from this where-to-play process are: First, the power of seeing the bigger picture.

And by the way, this is proven by an academic study that was done by my colleague, Professor Mark Gruber and his colleagues and was published in Management Science. We know now that generating a set of market opportunities before your initial market entry decision actually increases your chances of success. So taking the time to see the bigger picture — your landscape of opportunities — is really important. Maybe this is the first takeaway I want the founders to get.

The second one is the power of structured processes. It’s of course the Market Opportunity Navigator, and there are other tools, very good tools out there. But just by walking through a structured approach, it helps you to make a more informed decision. But it’s also a communication. It’s a shared language, and it allows you to manage your knowledge over time, reflect on your learning, go back to what you’ve known and see what it means if you need to revisit your strategy, et cetera.

So I think my second takeaway is: adopt the structure. Don’t base it on lack or intuition, use structured approaches for these critical strategic decisions. And lastly — and this is very, I would say, in a modest way — it seems simple, like three steps, three worksheets. But it’s actually a complicated process. It’s a learning journey, as you mentioned. It takes time. You need to gather a lot of information. It’s frustrating sometimes. Some things you just don’t know and you cannot know. But you still want to do your best to make an informed decision.

So just maybe keep in mind: this is not an easy process. And maybe final thing if you run a systematic approach, it still doesn’t give you a crystal ball that tells you the future. So we have to acknowledge uncertainty, and we have to live with this, and we have to prepare ourselves to adapt and change over time. But yeah, this is important too.

Shubha K. Chakravarthy: So it’s about the avoidable risk versus the unavoidable uncertainties. So you just narrow it down into something more controllable and more worthwhile for you to take that risk. I love it. So you talked a lot about the worksheets and the steps. Are there resources that founders can use to start implementing what you walked us through today?

Sharon Tal: Sure. So if you visit wheretoplay.co. That’s a website. There are plenty of supporting resources there. First, you can download the worksheets. They’re completely free. There’s a lot of case studies and how-to articles on our website. There are some webinars, et cetera. You can also enroll in a free edX course called Find the Right Market for Your Innovation, where we explain the whole process.  And there’s the book Where to Play, available in any format you like to read, in any e-commerce site where you buy or order your books.

Shubha K. Chakravarthy: Great, and I have to make a plug for the book, because I first bought the Kindle version and then I got so into it that I then ordered the hard copy version and I’ve been working my way through all of that. So I, from personal experience, it definitely was eye-opening for me.

Integrating with Lean Startup and Business Model Canvas

Shubha K. Chakravarthy:  Just one last thing, you talked a little bit about Lean Canvas, or I should say Lean Startup, and then the Business Model Canvas. Are there specific tips in terms of how this integrates, if, for founders and startup programs that work with these approaches and frameworks? What have you seen work well in terms of where this fits in, into the broader scheme?

Sharon Tal: Yes. I love this question. When we launched this book, we met Steve Blank, the Godfather of Lean Startup Methodology and he immediately got it. He said, “All right, it’s a tool to help us stop playing target market roulette,” because the Lean Startup process assumes that you have a starting point where you want to experiment, but many times you just don’t know.

And many times there’s a broad set of directions where you can go. So it’s a front end of the customer development process that you can use to map out your landscape of opportunities, set the boundaries for your Lean experimentation process. However, again, we want to keep in mind it’s iterative. It’s not a staged process, it’s an iterative process.

So you can zoom in and you can zoom out and zoom in, and zoom out until you find, really have confidence in the data you gathered to set your strategy. So, where you start, it’s a good question because sometimes you can start with the Where to Play, set the boundaries, and go into the Lean experimentation toolset.

But sometimes you can start with the Lean experimentation toolset, figure out, like, is this a good or a bad market opportunity for you? And then go up and see the broader landscape. And then maybe just make sure you don’t lock yourself that make sure you are developing an agile startup and bake agility into your strategy. And in fact, this whole Where to Play and Lean experimentation toolset is not just to figure out where to start building your business.

It’s actually every time you need to revisit your strategy if you need to pivot, or when you need to grow. In every moment like this, you can go back to this toolset see what has changed or what is the current situation, map your opportunities, run and validate them, and figure out your strategy. So it’s kind of an ongoing toolset.

Shubha K. Chakravarthy: And what about the Business Model Canvas? Do you have any thoughts on that?

Sharon Tal: For me, the Business Model Canvas is one tool in the Lean Startup toolset once you set your boundaries. So what I call Lean experimentation is not just about the MVP but also about the element, different elements of the business model. But again, you can also think about them in different parts of the process as well.

Shubha K. Chakravarthy: Fabulous. That’s been a pretty amazing conversation. You’ve walked us through, I feel much clearer in terms of where I start and where I end up as a founder, especially if we had a technology that we were inventing and playing with. Is there anything else I should have asked you but I didn’t, that you think founders should know?

Sharon Tal: Wow, Shubha, I think you were so thorough here with your questions and I also love the fact that you like, come from the trenches that you actually read the book and practiced it on your own startup. So I think you really feel the pain and the core quest, the key question mark that comes into mind when you approach this.

Final Thoughts and Broader Applications

Sharon Tal: So maybe just a final comment. We’ve talked about STEM and deep tech but I also want to put here on the table the fact that. It doesn’t have to be a deep tech technology; the question of where to play could start from any unique set of competencies. So for example, I’m assuming you are a consultant or an educator, a facilitator.

Shubha K. Chakravarthy: I’m a founder.

Sharon Tal: Okay. I am a consultant and a facilitator and an educator and I can apply it myself to figure out which market to focus on now. So it doesn’t need to start just from the whole process doesn’t need to spark just from a core technological invention. It can start from any set of unique competencies. That’s what I wanted to also highlight here.

Shubha K. Chakravarthy: Wise words. And with that I’ll say thank you very much. It’s been an amazing and fun conversation. I’ve learned a lot and I know that our founders will as well. So thank you so much for taking a lot of time out of your day and walking us through this super valuable framework.

Sharon Tal: Thank you. It was a pleasure.