Always stay alert

Just because you have made it once, doesn’t mean that you have made it forever.

Just as you replaced an incumbent by delivering a better, smarter, cheaper or whatever solution to your customers pains, somebody else could come in tomorrow and do to you what you did to them.

Just as you worked tenaciously to get to where you are today and be successful, numerous other players are plotting the same way against you as we speak.

So always stay alert. Always be ready to change and transform what you’re doing in order to stay ahead.

The second you stop doing that you risk becoming a lame duck.

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”What’s your pain?”

One of the worst sins you can commit with a customer IMHO is to just babble on about your own qualities and all the cool things your product can do, without even considering getting a feel for what the customers problem first.

I know. Because I have committed this sin a lot of times. And lived to regret it.

In start of going in and just pitching what you have, you should start by asking what problem(s) the customer is experiencing.

When they then start talking about their pain(s) – and you ask good follow-up questions – you start getting a feel for what they need. And if you’re any good you’re able to put yourself and your product into that context as THE solution to the customers problem(s).

Relief of pain is important for customers. A lot of them will probably even be measured on their ability to solve a problem, deliver a specific result og succeed at some level, where your help and product could be the missing tool they need.

And if the pain is big enough, and you position yourself and your solution exactly where the pain is, the chances of you making a sale is much, much bigger.

When you think about it it’s not really rocket science. It’s ‘just’ a matter of being able to start out listening more than you have the propensity to talk.

Just ask: “What do you need?”. And then take it from there.

(Photo by Aarón Blanco Tejedor on Unsplash)

(In)efficiency rocks

Maybe the headline is a bit controversial, but let me try to explain what I mean.

Oftentimes I see products that are super efficient in who they are targeted towards. You can see from the product and the words being used to tell about it that the team behind has been guided by a very clear idea of who they were building the product for.

All that is good. In some respects. But potentially limiting in others.

Of course it’s great to have alignment with who you are solving a problem for as it should increase your chances of getting Product Market-fit for your product. The flipside however is that that exact approach has a risk of you being limited in your thinking and thus in what your product could do and become, if you had a bigger perspective.

A lot of this has to do with setting the right strategy, and even though many will claim that they have had thoughtful strategy processes, it is also rather safe to say that not all people who work on developing strategies are great strategists.

If for instance the people in charge of developing your product strategy are very minded on a specific outcome, chances are that they will build the plan that suits their purpose and delivers on what they wanted in the first place. And they might very well not be the best or most profitable plan.

Thus what you should do is first of all to ensure that your strategy planning has the right source of altitude from the beginning, so you really get the broadest possible view of the horizon. And then you should go about being inefficient in building your product.

Now, that sounds pretty horrible, so what does it mean?

Essentially it just means that you should resist the urge to have a specific, narrow outcome in mind and build your product towards that. Yes, you might be able to get a very efficient process going towards that goal, but the goal itself may well turn out to be limiting.

Instead by taking a more inefficient approach you’re being open towards outcomes. Your mind becomes broader, and your thinking in terms of how your product can be applied and for whom will be bigger and ultimately have greater chance of profitability. Provided of course that the features and value proposition of the product itself is still razor sharp.

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Solve my problem, please

Normally, we’re used to seeing startups looking to solve the problems of their customers.

But lately, I have realized that there is actually quite a lot of startups, who are essentially asking their customers to solve their own problems.

I typically see it in outreach emails asking me to go to a service or a product and do something specific; update something, try out a new feature or something of that nature. And it’s all perfectly fine.

But it also sends a signal that something is off; something is less than ideal. We have encountered a problem or a challenge on our end, and you, our dear customer, should ideally help us fix it.

Essentially, what you’re often communicating in this way is a shortcoming. Something you didn’t get right in the first place, and now you’re looking to compensate or perhaps even fix the issue.

You could of course argue that there is no other way than outreach to tell about new offers, features etc., and to a large extend, you would be right about that.

However, I could also make the argument that if you had a truly sticky product that your customers were so habitually using they knew it inside and out, they would find out these things themselves, and there would be little need to do outreach to already existing customers.

In summary: When your need to do outreach to your customers is on the increase, ask yourself where in your product or service, your core offering may be broken or less than ideal.

That is the problem, you should solve. Yourself.

(Photo by Michal Matlon on Unsplash)

What’s the right price?

There are a number of fundamental questions in business, and one of the most fundamental ones to any business is the one of what to charge for your product?

Clearly there is not one 100% correct answer for that question as it always depends on a lot of different things. And yes, pricing is a science in itself and super hard to get right. But there are a few simple considerations to at least get you started.

They are: Cheap But Expensive, Optimum and Expensive For Good Reason.

The Cheap But Expensive option is the starter option. Yes, it will cost the customer less than the other ones, but in reality it is priced in a way to ensure, (1) you get your starting costs covered and (2) there is every incentive to upgrade to a more expensive solution.

Think of this as the small but overpriced ice cream cone that really just screams you were too cheap to get a bigger one.

The Optimum price point is where the offer makes financial sense compared to the value you’re getting as a customer. Yes, you pay, but you also have a pretty good understanding of why you are being asked to pay what you’re being asked. It can be a super hard point to reach and get right, but this is where you want to be also for the sake of customer retention.

Going back to the ice cream cone example from above this is where the ratio between price and the scoops of ice, you get makes sense, and where you think the value is good enough that you also with a happy heart buy for your friends and family.

The final price point – the Expensive For Good Reason – is the where customers demands more of you, and you basically say “Ok, but it’s going to cost you then”.

This is a scary point for startups because it’s usually here where pilot customers, who haven’t really paid that much (if anything), and which the startup needs to prove its case to investors, reside; putting huge demands on the team for promised service, support and updates for very little if any return.

This is the price point where it’s ok to be greedy as a startup and consider that if a customer is asking too much, you can do the same in terms of asking for more money. Yes, you risk losing the customer, but if it was essentially making a loss, you’re in 99,5 % of all cases better off without it anyway.

At the ice cream vendor this is where you as a customer just want an obscene amount of ice cream in your cone, and you’re just billed accordingly. A totally fair exchange of value.

So in summary: Getting pricing right is super, super hard, but if you have more price points than one, you will want 3 price points:

A low price point that covers as much of your cost as possible and provides a clear upgrade incentive,

A middle one that scales well (“Most Popular Option”, as it’s often called),

And one for special requirements, where you basically ensure you get very well compensated for going out of your way to satisfy a very needy customer with their special needs – without getting distracted from your strategy and roadmap to support it.

(Photo by Angèle Kamp on Unsplash)

Dealing with lost outcome

A couple of years ago I had the great pleasure of helping an interesting startup in the data management and analytics space get off the ground.

Part of that was to help them pitch to early angel investors in order to get the first funding. And one of the international investors we talked to had a point that stayed with me:

“To me this just looks like data porn”.

What he meant was: A lot of numbers and statistics but very little real actionable insights that made sense to him. And which he thus doubted would ever make sense to future customers.

His point came back to haunt me when I read a statistic claiming that 80% or so of SMEs really don’t know how to capitalize on their data, while reading another place that 90% of the companies providing the data management and analytics tools at the same time think they are delivering a killer user experience that just unlocks value at the click of a button.

There is something that is disconnected here. And I have a hunch what it might be:

The ability for SMEs to identify the outcomes they’re looking for – put them into words – coupled with an inability of the providers to think in terms of outcomes rather than inputs and analytics, when they design products.

It’s like one party is from Mars, the other is from Venus. And somehow they just can’t find each other.

In all fairness, I don’t think this is only true with data management and analytics. I think it’s a more generic point across B2B products and services; that startups and vendors are so focused on developing great products based on their own merits rather than developing great products that helps future customers get to the outcomes they are looking for in the easiest and most painless way possible.

So what could a remedy for all this be?

Communication. Built-in communication. A built-in communication and story telling strategy so to say that informs how the products are structured, the user experience defined and the value being delivered to the customer in such a way that they will not for a second doubt they have chosen the right product to help them get the outcome they have set for themselves.

A lot of things are happening in parallel in product development today, and many of them are good. But I think they lack the glue of the overarching story; the keeping track of the ‘Why?’ of it all when it comes to delivering value and outcomes including all the bigger and smaller sanity checks, you should include along the way.

Great communication could be that glue.

Great communication could tie prioritization of the roadmap with the user experience, the optimized flows and how you present the product and it’s core features to products. Great communication should be the rocket fuel of the growth story as well and dictate how the product is communicated, being sold and serviced afterwards.

Because communication is not only about PR, press releases and coming up with the creatives for the next campaign. Communication should be a key component of both product, sales and company strategy.

So people like the business angel from above and the customers, he was thinking of, instinctively ‘get it’ because the story points directly towards achieving a highly valuable and desired outcome.

(Photo by JOSHUA COLEMAN on Unsplash)

Finding the edge

The other day I heard a fascinating episode of the podcast “Pivot” with Kara Swisher and Scott Galloway, where they talked with a guest about the potential in space exploration and colonizing the Moon and different planets.

In the podcast the point was made that when it comes to the Moon, every big nation wants to set up camp in pretty much the same place: Near the South Pole on the edge between the dark side of the Moon and the side that actually gets sunlight.

And why is that?

Obviously, the people who are going to be staying there, want to be in the light in order to function. But the most ressources, including the possibility for finding water, is on the dark side.

Hence you want to find the right balance of sun and darkness by being on the edge.

What kind of implication does that potentially have for startups?

One could be that in order to really be able to change things and make a profound impact, you need to be operating on the demarkation line between sun and darkness;

On the sunny side you will be able to communicate your vision and engage your customers by using arguments and value propositions that they will understand and engage with.

On the dark side you will be uncovering the differentiating way of solving your customers problems that will ultimately set you apart from the competition.

Now, what happens if you don’t find that line, that edge?

If you’re too much on the sunny side you may be able to get attention. But your offering will probably not over the long run be differentiated enough to sustain an advantage over the competition. Put in another way: You run the risk of flaming out in the sunlight.

If you’re however too much on the dark side, you run the classic risk of working on something that nobody will ever really figure out could be a solution to your problem. You will so to say be alone in the dark. Until you die (which startups doing something nobody can see the benefit of eventually do).

So think about your Moon-shot so to say and set about finding the position near the edge between light and darkness. It might take some serious experimentation to get it right, but isn’t that what any kind of exploration is really all about?

(Photo by Ganapathy Kumar on Unsplash)

Time your own luck – now

Getting a business off the ground of course has a lot to do with the idea and what pain you’re looking to solve for customers. But it is also about timing and luck.

Some people say that you can make your own luck. And perhaps that is true. To an extend.

What you certainly can do is look around you at what’s going on. And if you look at the world right now, there are at least 3 good reasons, as I see them, why this might be a great moment to time your luck so to say and venture into something new.

First of all, a lot of incumbents in different industries are busy elsewhere handling the fallout from the pandemic with disrupted supply chains, increasing prices on goods, lack of talent etc. They’re way to busy with that to innovate in earnest themselves let alone keep a keen eye on what you’re doing.

Second, there are a lot of change afoot after the pandemic. New trends have emerged, new patterns of behaviour – some of which we still need to see the resilience of after the pandemic eases, mind you – have got on the radar etc. And with that new pains, needs and demand for new, innovative solutions that you might be able to provide.

And third, there is the work-from-home thing. While some people yearn to get back to normal office life, there are also millions of people out there who feel the opposite. They are ready for a change. Maybe even for a move into entrepreneurship. So when I said above that incumbents might have a hard time finding the right talent, it could be an entirely different matter for you.

So what are you waiting for?

(Photo by Michał Parzuchowski on Unsplash)