Branching Out to New Markets
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Don't limit your customer base; explore all the industries that could possibly use your product or service. That's exactly what Neil Wadhawan did when he co-founded Heartwood Studios with Raj Raheja. Wadhawan, 25, was a student at Northeastern University when he met Raheja, 32, through a family connection. Together they developed a company to produce 3-D renderings and animations for architects and designers. "We knew [3-D animation] was a necessary tool. Being able to visualize something before it's built is powerful," says Wadhawan.
After starting the business in 2002, Wadhawan and Raheja realized that their 3-D animations could be vital to more than just architects and started looking for other industries in which they could put their services to use. They began serving clients in the defense and aerospace industries, and they've even branched out into the sports world with stadium animations for the Dallas Cowboys and New Jersey Nets.
Marketing to each specialized industry takes serious preparation--Wadhawan says they develop a different marketing approach and talking points for each one. But he points out that sharing projects from one industry with clients from another can help make the sale. "Often, somebody in the sports world, for example, will love to see something from the defense world," says Wadhawan. "It helps them understand that this digital technology can be used [to do anything]."
Expanding into new markets means first putting new targets on your strategic marketing map, says Marc H. Meyer, entrepreneurship and innovation group coordinator at Northeastern University and author of The Fast Path to Corporate Growth: Leveraging Knowledge and Technologies to New Market Applications. "Your technology has to be robust and stable," Meyer explains. "It has to be a platform you can adapt to different types of applications without having to reinvent the wheel."
But don't get too overzealous when thinking up new industries for your product or service. "The classic mistake young entrepreneurs make is that they're prone to throwing a lot of stuff up against the wall and seeing what sticks," says Meyer. Instead, systematically segment your market and do opportunity assessments on the market size, growth rate and adaptability of your technology to see where the future really lies. "You don't want to build [just one thing]," says Meyer. "You want to build a product line."
The founders of Heartwood Studios have certainly studied their target markets and are even looking to expand their services into the online retail segment with 3-D immersion platforms that would let customers browse through sites designed to look like real stores and also see products in use. With continued innovation, they expect to push 2007 sales to between $2 million and $3 million. Meanwhile, they hope to expand the company's role as a sort of visual storyteller, "bringing Hollywood to Heartwood," as Wadhawan describes it. "There's a need in every [industry] for 3-D," says Wadhawan. "Our biggest challenge over the [coming] years will be deciding what not to do."