A Bumpy Ride for the First 10 Customers

Continuing with the post Assessing Product/Market Fit, there’s a related point that the first 10 customers of a startup often have a bumpy ride. As part of assessing product/market fit, if numerous customer requests and product issues are signs that product/market fit isn’t in place yet, it follows that it’s common for early customers to have problems as product/market fit is so hard to attain.

Here are a few thoughts on the challenges of the initial customer experience:

  • Work to be overly accessible and available as customer feedback and quick resolution of issues are critical
  • Know that problems and bugs are common as it’s nearly impossible to test every use case (it’s more important to move fast and iterate than try and be perfect)
  • Understand how the customer interacts with the app using a product like FullStory or Hotjar
  • Proactively reach out to the customer on a regular basis (e.g. weekly), eventually using a cadence system like SalesLoft or Trustfuel

The first batch of customers almost always have a bumpy ride. Entrepreneurs should recognize that this is normal and work hard to still provide the best experience possible.

What else? What are some more thoughts initial customers having a bumpy ride?

Assessing Product/Market Fit

One of the never-ending startup discussions is around assessing product/market fit. Product/market fit is the idea that the product’s form and functionality meets the needs of the market. Fit isn’t an on/off item, rather it’s a continuum with various dimensions. And, for entrepreneurs without product/market fit, not much else matters.

Here are a few ideas for assessing product/market fit:

  • Passionate Customers – If you told your customers that the product would be shut down tomorrow, how loud would they complain?
  • Customer Requests – How well does the product solve the customer’s problems today in it’s current form as opposed to needing further customizations?
  • Customer Referrals – Of the last 10 customers signed, how many referred another potential lead?
  • Limited Product Issues – Of the last 10 customers signed, how many ran into product issues or bugs?
  • Daily/Weekly Active Users – Do the customers use the product in a consistent daily or weekly fashion over an extended period of time (e.g. 4-6 weeks)?

Ultimately, assessing product/market fit is about assessing how much value customers are receiving from the product and the actions they are taking (e.g. regular usage, referrals, etc.). Product/market fit is the first critical milestone in the entrepreneurial journey.

What else? What are some more thoughts on assessing product/market fit?

Feature Rich vs Feature Niche

When building a software product, there’s a human tendency to go broad and add every feature a customer requests. Yet, some of the most successful products do a limited number of things well and eschew the bloat found in most applications.

I call this the feature rich vs feature niche conundrum.

Feature rich products have dozens of modules and hundreds of functions. Feature niche products have a select number of modules with only the most valuable functions.

Pardot is very much a feature rich product with dozens of B2B marketing modules. Calendly is very much a feature niche product doing beautiful, simple scheduling.

Entrepreneurs need to be intentional about their product strategy and consider the feature rich vs feature niche trade-offs.

What else? What are some more thoughts on feature rich vs feature niche?

Customer Discovery to Understand the Problem

Early on, it’s critical to understand the customer’s problem. Too often, entrepreneurs come up with an idea that’s good to them, but falls flat with the potential customer. Use customer discovery to understand the problem without trying to sell them on the existing idea.

Here are a few things to keep in mind with customer discovery interviews:

  • Don’t lead the witness —it’s all too common to try and guide the potential customer down a path that’s consistent with the existing idea
  • Ask broad, open ended questions (remember the old adage: humans have two ears and one mouth for a reason — listen twice as much as you talk)
  • Work to understand how things work currently with as much minute detail as you can uncover
  • Find out what the ideal solution would be if time and money were no issue (if you could wave a magic wand and have anything you wanted , what would it be?)
  • Never show any prototypes you might have until after you’ve asked all your main questions (don’t introduce bias!)

Entrepreneurs would do well to use customer discovery to deeply understand the customer’s problem, and work to ignore their existing ideas.

What else? What are some more thoughts on customer discovery to understand the problem?

Drop the Second Product

Recently I was talking to an entrepreneur that had just started getting traction on a new product. After digging in, it was clear they still had a prior product they were selling and supporting, even though it only had a handful of customers. My advice: drop the second product.

Here are a few reasons why a startup should only have one product:

  • Talent – The best people work on the most important product. Second products inevitably languish without the right talent.
  • Limited Resources – Startups are inherently resource constrained. If one product has limited resources then two products are going to have even more limited resources.
  • Go-To-MarketCustomer acquisition is the biggest challenge for startups. Dividing go-to-market across two products makes it even more challenging.
  • Speed – Startups beat large companies due to speed. Spread the efforts over multiple products and the speed is impacted. Stay fast and nimble.

Drop the second product. Entrepreneurs would do well to focus on one product and do it well.

What else? What are some more thoughts on the idea that startups should only have one product?

Customer Acquisition As the #1 Challenge

As the cost to build an app has gone down over the last 10 years due to open source and cloud computing, the number of apps as grown. Now, there are dozens of apps that do the same thing in every category imaginable. The result: customer acquisition is the number one challenge with so much noise in the market. And, it’s only going to get more challenging.

Here are four things to work on to build a customer acquisition machine:

  1. Community – Work towards 1,000 true fans. Start small. Find the first 10 that care. Then the first 100. Nurture the community and grow it over time.
  2. Content – Write original content. Make a statement. Have a strong opinion. Put new ideas out there. Find a rhythm.
  3. Engage – Connect with people. Target best-fit accounts. Run a process. Follow the account-based engagement best practices.
  4. Experiment – Follow the Traction book. Constantly experiment. Try new ideas like micro apps and social selling.

Customer acquisition is the most difficult challenge required for startups to succeed. Invest in it early and build the expertise over time.

What else? What are some more ways to build a customer acquisition machine?

You Can Never Over Invest in Product

One of the phrases I’ve heard a couple times in the past week is “you can never over invest in product.” The idea is that once you have product/market fit and a repeatable customer acquisition model, sales and marketing is always out in front of product development. There’s a natural tension between the go to market teams and the product/engineering teams, but often there’s an imbalance. Product development and engineering have nearly infinite economies of scale when combined with a great market.

Here are a few reasons why you can never over invest in product:

  • Finding great software engineers, UI/UX professionals, and product managers is really hard. No matter how fast you’d like to hire, it always takes longer than expected.
  • Software products have almost no marginal cost and great economies of scale making each incremental prospect signed and customer renewed that much more valuable. Better products make for happier customers.
  • Market opportunities come and go. If there’s a really special opportunity at hand, the opportunity cost of not winning the market is enormous.

Once entrepreneurs are in the growth stage of the business, you can never over invest in product. An amazing product has so many benefits, and opportunities.

What else? What are some more thoughts on the idea that you can never over invest in product?