Director Marketing Services
Your new product won’t fail because you ran out of cash.
Or because the creative didn’t live up to the hype.
Or a competitor beat you with a superior product.
Not primarily, anyway. These are symptoms of a core (and more common) problem.
The #1 reason new products fail is lack of market need.
A CB Insights study revealed the primary reason 101 new ventures failed was that they weren’t targeting meaningful problems for their customers. They were building a product looking for a customer, rather than directly going after customer needs.
Few startups or established companies build a new product thinking “We have no idea if people want this, but we’re going to do it!” and yet, it’s the “people don’t actually want this” part that sinks most ventures.
Lean Startup author Eric Reis recently addressed this mentality in a fantastic episode of the a16z podcast:
Even if the vision (of a new venture) is right-on, the specifics of the strategy often have fatal flaws…” and “…the best leaders care enough about the vision to make sure they get the details right.
If you’re a leader helping pioneer a new product, here are three questions you can ask yourself to make sure you’re on the right path:
- What assumptions are exposing us to the most risk, and how can we test them?
- How are we going to add ridiculous value for our customers?
- How can we test our ability to a) attract customers and b) actually deliver that value?
These questions will lead to dozens of follow ups that help you refine exactly what you’re trying to accomplish.
At DeveloperTown, we have a process called Sprint to Market that helps leaders answer the most important questions about their market and launch with customers, day 1. Through this processes we’ve been able to do things like help one of the largest security companies in the world estimate how much it would cost them to acquire customers for a new product through digital marketing channels…months before they actually had the product.
But many of the activities we recommend to clients can be tackled by anyone.
Here are some ideas to help you validate your target market early and launch with customers:
- Test the assumptions exposing you to the most risk. Your success in a new venture is directly connected to your ability to find and convert initial customers, or activate users. And yet so few companies actually start testing their business model, marketing channels, or value props until it’s too late. Here’s a few questions to ask/execute against in order to mitigate some of that risk early on:
What price points resonate with customers? What assumption(s) do we hold that would sink us if we’re wrong? Which digital channels are most effective for our target segment? How are competitors helping the customer solve the problem we’re addressing? Which features do customers want most?
All of these questions can be answered via market research, customer interviews, or digital marketing tests (i.e. testing marketing channels and messaging to see how targeted customers respond).
- Start validating the market before designing the product. Your product will be significantly better with the right dose of customer insight. This doesn’t mean letting customers dictate how to design and build the product — it means better understanding the problem you’re solving and the context your customer is living in by talking to them:
Where are they bleeding? What keeps them up at night? Where do they spend the most time online? What other products do they use regularly? What do they spend money on? When does their budget cycle end? How are they solving the problem you’re addressing today? What’s their next best alternative and how much does that cost?
- Add ridiculous value for customers long before you have something to sell. It’s easy to get caught up in whatever product your building and completely forget that you can start serving customers… today. In fact, this is the best way to build authority. Here’s a few things to consider that will help you
What can you do to help your target customer today? Can you manually replicate an early MVP version of your product before the technology is ready to get feedback? What about creating content that’s helpful enough to charge for and then giving it away? Or perhaps you organize an event or meet-up for your core target with the sole purpose of helping them meet the type of people they’d want to meet?
If you really want to win with a new product, get religious about adding value for your customers long before you have something to sell them.
You shouldn’t be on pins and needles on launch day. Start testing assumptions early and put your customers at the center of your design and build process — not your product. Doing so will help you avoid creating something they don’t want, and multiply the value you’re able to bring.