As a product strategist, I’ve consulted for businesses of various sizes, including startups. I love working with startups because the founders are always enthusiastic and usually have a wealth of experience from their professional careers and are ready to monetize it.
So, if you’re a new entrepreneur or have been struggling to come up with product-market fit, then read on. Based on my decades of consulting experience bringing a product to life, I’ve found many startups tend to make a few mistakes that have become a recurring theme to me.
Before you spend a lot of money or resources, my advice is to focus on these two things.
- Understanding demand by using a low-cost, low-effort solution.
- Figuring out how to market and acquire customers.
I will explain the two things in detail, but I find those who fail to understand their target audience’s behaviour and don’t put in the effort towards sales and marketing always tend to struggle to get off the ground.
Focus #1: Understanding demand by using a low-cost, low-effort solution
There have been occasions when startup founders came to me with an idea that’s not fully formed yet, but they want to build or are already building the product. It’s either missing a few ingredients or critical answers. More often than not, it’s not knowing who exactly would buy your product or service and what they need exactly. This mistake will cost them when they start to design and build the product.
It’s why I advocate testing with a minimum viable product (MVP) and following up with subsequent iterative developments. However, people tend to think that an MVP is a product with 1-2 features. I think you don’t even have to put in that much effort.
I’d suggest building a solution that requires the least amount of technology at the lowest cost. If there’s a cheaper or manual solution, then go with that. Think online forms, pre-made templates, no-code solutions, manual data entries, or software you can use out of the box—even better when it’s free.
The point is to figure out the value you are bringing to your target market. How you deliver the value doesn’t matter yet, so use the simplest, cheapest option available. Don’t focus too much on the future state of your product. In short, refrain from building an app, custom website, or software too early. It’s not always the right answer—yet.
Instead, find answers to these critical questions:
- Who exactly is your target customer?
- What is their biggest pain point?
- Why are current market solutions not good enough for them?
- Would they pay to get rid of this pain point or use this convenience?
- What is unique about your solution that they are willing to pay for?
Focus #2: Figuring out how to market and acquire customers
If you’ve done the first part right, you would already have some idea of who would pay for your product or service and how to reach out to them. Sales and marketing are critical components for any business, and you need to be working on this as early as possible, even before you build the product. Building a product is only half of the equation. Make sure you’re not missing the second half.
I’ll share a few tips on where to start below.
1. Thoroughly understand your target customers and market
As a startup, you’re probably bootstrapping with little resources. If you want to snag the first cohort of loyal customers, it’s better to focus on a specific audience rather than trying to appeal to a broad audience.
Once you’ve built the core supporters, it’s much easier to widen your reach and appeal. Therefore, I’d say you need to go hardcore in trying to understand the early adopters who would buy your product. This is also a more cost-effective way to market.
2. Craft a compelling and clear value proposition
Make sure you create a strong marketing message around it. Think about what makes your product different than others in the market. A simple, powerful message on the right channel is better than a high-budget campaign that tries to sell everything all at once. However, if your product fails to deliver the expected user experience and functionalities, then no amount of simple, powerful messaging is going to save your startup.
3. Focus on creating a community of loyal users
Whichever marketing platform you choose, you should concentrate on building a community of early adopters who are loyal. You’ll want to engage with them regularly, get their feedback, and aim to deliver the maximum value for them. The cheapest form of marketing is word-of-mouth, but it’s also one of the hardest to get right.
4. Measure and optimise your marketing
Just like building your product iteratively, you should approach your marketing in the same way. Try different messaging, channels, and offers to discover what works best for your product. You can monitor a few core KPIs such as conversion rate, engagement rate, and customer acquisition costs. Just remember, you won’t have all the answers at the start, and that’s why you need to continually measure your sales and marketing ROI.