Building a new product or a service is a challenging endeavor. As an entrepreneur you will need to figure out why customers care about your product — it’s value proposition. You’ll also need to figure out who your customers are, how to reach them, how to price your product and so forth. You’ll also have to understand the competitive landscape: who are the other players in your market and what if any are the substitutes facing your product. You might find yourself selling into a new market with very few competitors, or conversely in a crowded and hyper-competitive market with powerful incumbents. In this article, I will focus on market dynamics that I dub a head-on collision.
Before I define what a head-on collision means, I want to first present a very simple value-chain model. Companies build products, which they then place in distribution channels to ultimately reach their customers. These channels could be physical like retail stores, virtual like websites and could include all sorts of intermediaries like re-sellers, consultants, partners and so on. There are obviously many other aspects of the product value chain that this model ignores.
