Existing, Resegmented, New, Clone: Choosing Your Market Type
One of the most useful ideas in Steve Blank's customer development is that not all markets are the same, and the market type you are in dictates how you should compete. Get this wrong and you will run the wrong playbook. Here are the four types and how to act in each.
Existing market
Customers are known, their needs are about performance, and competitors are many. Think a faster database or a better CRM.
How to compete: win on performance, usually technology. The risk is branding, sales, and distribution, because the customer already knows the category and has options. You need to be visibly better at the thing they already buy.
Resegmented market
Customers may be known, but you serve them with a better fit, often a niche or a cheaper or simpler version. Think Southwest in air travel, or a tool built for one specific role.
How to compete: pick a wedge. Eliminate something the industry competes on, reduce something below the standard, or raise something well above it. This is the most common winning move for a small startup, you do not beat the incumbents at their game, you change the game for a slice of the market.
New market
You are creating demand that did not exist. Customers are unknown, the need is transformational, and there are no direct competitors. Think the first ride-sharing or daily-deals product.
How to compete: the risk is evangelism and education. Nobody is searching for your solution because they do not know it exists. This is the hardest and slowest path, you have to teach the market, which is expensive. Most "no competitors" ideas are actually a sign of no demand, so be honest about which it is.
Clone market
A proven model brought to a new geography or context. Customers are possibly known, the need is a local version of something that works elsewhere.
How to compete: speed and local fit. The model is validated, the risk is misjudging local needs. Move fast and adapt to the market you are cloning into.
Why this matters for your plan
Your market type changes everything downstream:
- In an existing market, you need a sharp performance claim and strong distribution.
- In a resegmented market, you need a clear wedge and a tight niche.
- In a new market, you need an education budget and patience.
- In a clone market, you need speed and local insight.
Founders get into trouble when they run a new-market education playbook in a crowded existing market, or try to out-feature incumbents when they should have resegmented.
Find your type
A DemandSonar scan classifies your market type from the real competitive landscape and tells you the matching way to compete, so your go-to-market matches the market you are actually in.