Successful Strategies for Products that Win
It's every young startup founder to have their idea survive the turbulence of the startup stage and grow to be an entrepreneurial achievement and a fulfillment of their dreams too. Unfortunately, though, most startups rarely reach that stage. In Africa alone, only 5% of startups see through their first year of operations. There are several reasons why this happens ranging from cash flow, legal, financial, managerial, marketing, sales problems that most of the time are unpredicted or covered for. Even the most experienced startup founders face failure as there is nothing that can be done to assure 100% percent success of a product launched.
While this is true, there is something each startup founder can do to set its product to the path of success and give it a chance of success. According to Steve Blank in his book, The Four Steps Of Epiphany, the success of products is determined by the customer not by the product created. Steve suggests dumping of the Product Development Model used by Start-Ups and adopting the new and updated method called The Customer Development Model. The Customer Development Model is divided into four steps;
1. Customer Discovery
The Customer Discovery stage of the process takes your hypothesis of the problem you are aiming to solve and the product you are proposing and tests them in front of potential customers. By testing your hypothesis at this stage, and not proceed until you have verified your vision, the startup is able to keep expenditure low before it actually needs to ramp up the sales and marketing divisions. Note: Cash flow management is the most common reason why startups fail.
2. Customer Validation
The Customer Validation step is where the startup begins to get ready to sell. A lot of thought needs to go into the sale process and the team who are going to be selling the product. It’s also important to look at who your potential customer will be, your distribution channel and how you can target the critical people within an Organisation to close a sale.
An important realization at this stage is that you must first sell to visionary customers, and not chase after the mass market. You can only start to think about the mass market once you have successfully attacked and dominated your niche. Once your customers know you exist you can proceed to mass acquire your customers.
3. Customer Creation
Much of the Customer Creation stage is determining your market type and your launch strategy. Unlike common myth, not all startup companies should launch the same way. In fact, launching a product into a new market, the same way a startup would launch a product into an existing market could be potentially disastrous. It is also important at this stage to find the right audiences, reaffirm your relationships key market influencers and agree upon the metrics for measuring the success of your demand creation strategy. Customer Creation is critical to ensure the startup can be able to reach the numbers possible to sustain itself and be able to post the initial profits.
4. Company Building
The final part of The Four Steps to the Epiphany is the act of building a company. This focuses on creating the correct departments and processes for the specific market that the startup falls into. Intrinsic in this idea is that for each different market type (new, existing, resegmented) there should be a different approach to building the company. Steve also goes on to highlight how important it is to create the right company culture and how fostering a “mission critical” rather than a “process orientated” company is important for future growth and success as well as holding on to the key talent that will take the company forward.
Its important for each startup to ensure that not only do the leaders have and ingest a copy of Steve G Blanks Four Steps of Epiphany but also the employees understand the value of the customer other than the product towards the life of the startup. Get your copy of The Four Steps of Epiphany today exclusive on all bookstores. Remember this is an educational article and no assurance can be made that what worked for others is right for you.