This article addresses two issues (in a two-part series) that Startups face while going to market and operating there.
The first is the eternal and most fundamental debate – What approach should Startups adopt while going to market. A Product centric approach or a customer centric approach.
Product first or Customer first?
The submission here is that everything begins and ends with the customer.
In present times, most Startups fail NOT because they do not have a good product. They fail because they lack customers. This in turn happens because they have not studied the market before making a product and launching it. And because they don’t study the market, they find that there are no ‘takers’ for the product that they launched. Huge resources are spent after the product launch, on the selling and advertising effort, but sales don’t pick up. It is only a matter of time, before the business shuts shop.
The approach commonly is “inside out” rather than “outside in”. The “inside-out” approach means that companies ASSUME what the customer might want, and design a product accordingly. Whereas the correct approach would be to let the customer tell them what she wants (the ‘outside in’ approach).
Another way of looking at this common mistake that Startups make, is that Startups adopt a product centric approach, which put simply is – ‘make the product and launch it and the customer will come’. This approach might work if a Startup is entering an existing category where the product features and market dynamics are known. However, this approach will most likely fail if the Startup decides to launch a new product in a new market, or a new product in a new section of the existing market.
The “Outside In” or the “Customer centric” approach
Marketing is all about understanding the “pain area” of the customer, and offering a solution to that pain area (or need) in the form of a product. It follows logically then, that Startups should begin the product launch journey by going to the customer to understand her problem and the “real need”. This feedback is REAL as opposed to any assumption that the business may make about the product required in the market. This feedback should hence form the basis of product development. Everything about the product should start from the feedback gained from the customers.
The next steps are to actually build a ‘prototype’ of the product that offers a solution to the problem shared by the customer. Once the prototype is ready it needs to be taken back to the customer to verify whether the value proposition offered aligns with the expectations of the customer. This is called ‘test marketing’.
It is critical to get feedback through test marketing before the company commits resources to full-scale product manufacturing. The point to be clarified here is that the feedback is not to confirm whether the company had made the perfect product for the customer. It is to confirm the company’s assumptions about the customers’ problem and need, and the solution offered.
For testing the value proposition of their product, companies lean on a set of early product adopters who are sincere and loyal in providing feedback. The “build prototype – seek feedback – modify – seek feedback” cycle may involve many iterations before the Startup team are reasonably sure of the final form of the product to be launched.
When companies listen to this core group carefully, they are bound to execute a successful product strategy.
Article and Photo credit : Mr Puneet Mathur
Puneet Mathur is a Certified Life Coach, Certified Business Coach and a Certified Organization Development Coach. He specialises in helping business leaders to transform their enterprise into a professionally run Company by implementing state of art systems and processes, and building a highly motivated team
Puneet is an experienced business leader, with about 30 years of Corporate Leadership experience in reputed Multi National and Indian Companies in the FMCG and Chemicals sector. He started his career with Britannia Industries as a Management Trainee. He has worked varied roles in Britannia Industries Ltd. Marico Industries Ltd. Coca Cola, and the Jubilant Bhartia Group. His last corporate stint was with Jubilant Industries Ltd. As Senior Vice President and Business Head of a strategic business unit (SBU, Puneet supervised Global Business Development, Global Key Account Management, Manufacturing R&D & New Product Development. Puneet has extensive experience in Sales & Distribution of FMCG products and Speciality Chemicals (B2B business). He has a rich experience of expanding distribution reach, Sales Force Productivity, International Business Development, and Exports.
Email: pmathur@principiumadvisory.in mail@puneetmathur.in Websites: www.principiumadvisory.in www.puneetmathur.in Blogs www.principiumcoaching.blogspot.com www.principiumcoaching.wordpress.com
As always, great insight
True Prof. Shankar, Puneet sir is a great business coach
Thank you