Must you 'know' your market, really?

One of entrepreneurship’s great maxims is that it is vital that a founder know his/her market.

But I’ve recently met a couple of really impressive entrepreneurs who have very little–if anything–in common with the markets their businesses purport serve.

One of them is a cool Denver-based startup called Zwaggle. Live since August, it’s a community exchange where parents swap toys and clothing for their children, for free. The two guys who founded it, Andrew Hoag and Adam Levy are both single swashbucklers with no parenting experience.

This might give pause to a weak-spined VC. But these two guys are smart as all get out, and–based on the response from my own friends and family who are parents and have checked out the site–Zwaggle has the potential to be very successful.

It’s really expensive to raise children: you have to buy all this high-priced stuff that the kids outgrow in a matter of months or weeks. Which is why parents have always recycled the big-ticket baby gear with one another, like car seats and cribs, and of course, clothes. It’s usually a friends and neighbors sort of thing.

But as Andrew put it to me recently over a dinner:

“Zwaggle just helps parents do something they’re already doing, only much more efficiently. We’re pounding the ebay model.”

Zwaggle makes it possible for parents to exchange car seats, cribs and much more — even a breast pump, which sounds gross, until you realize that this model costs upwards of $280 and likely won’t be covered by insurance. And as a durable good, it gets very little wear by each user. So why not extend the life of the product by passing it on? Best thing here: certain of the plastic pieces (tubbing, nipples, etc.) have to be replaced by each user for hygienic reasons = a nifty peripherals market for Zwaggle.

I think an efficiency model looks especially smart in a lagging economy. Who says you have to be a parent to comprehend a parent’s needs?

Zwaggle isn’t the only example of a founder demonstrating insight into a market he or she ought to know next-to-nothing about. (If you know of others, send us a note.) For now, this notion prompts our

Question of the Day: How important is it–really–for a founder to “know” his market? Under what circumstances can this old adage be abandoned? How do you know, when you “know enough” about a market? And if you’re like Andrew and Adam, who do you position this as an advantage to potential investors?

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