We’ve worked with many new entrepreneurs over the years, and there’s one consistent mistake we see time and time again. First-time founders’ laser-beam focus on product features often neglects the importance of understanding value proposition, customer benefits, and market analysis.
When early market analysis is neglected, initial assumptions about customer behavior, product adoption, and value offering, typically fall short of expectations once the product is in the hands of customers. This often results in important product changes and redesigns in order to meet customer needs which usually initiates a new development cycle. And while there is merit in the “go ugly early” philosophy of product management –– taking the extra time to secure customer feedback before development begins can increase efficiency, save precious resources, and set a smarter course towards product/market fit.
From the start, an entrepreneur’s idea for a product or service must have a rock-solid value proposition with customer benefits that are easy to define. The goal is to define a competitive advantage so good that it’s practically unfair. Because of the increasingly competitive nature of technology solutions and the number of options available to customers, we find that an early focus on defining these market issues is imperative. So how do you go about proving value to potential customers when you don’t even have a product to demonstrate?
Defining this “unfair advantage” over the existing competition can begin with user research. Ask these hard-hitting questions from at least 10 potential customers:
- How pressing is the problem we propose to solve? How do you address the problem today?
- Are there existing solutions in the market? If not, ask why? (This will help get to the problem that truly needs solving.)
- What features are required in a “must-have” product?
- What is the minimum viable product required to provide value?
- What price could be justified for solving the problem?
- Would proof of value be required before purchase?
Compiling this initial customer feedback is well worth the time spent since the answers can impact resource allocation. This information will help to define the initial product plan and allow for the effective use of valuable early-stage startup time and money. And lastly, defining your unfair advantage first will help minimize big (bad) surprises that often show up when beta products first hit the hands of potential customers.