When the Market says “Maybe”
by Vijay Anand
You are quite screwed. Yep, you are. So much so that you’d realize that No is actually a great thing
In the process of trying to figure out the business model of a startup, the fundamental premise that you work on is that the market will tell you what they want, what they will pay for and what they want more of. Most often than not, thats actually a very optimistic approach to the situation. What most companies will not realize is that a customer saying “No” is infact the most generous act of kindness. To say No, is to give you a fresh lease on life and to get you to iterate. Infact “No” is at the heart of innovation when it comes to product building.
In the book “Getting to Plan B“, John mullins states how most business plans dont survive contact with the customer. The truth of the matter is, in most cases you will never be able to judge whether they love it or hate it – or worse, they are quite lukewarm about it.
In the book you will also notice that there is this notion of picking analogs and antilogs to see if there has been prior experimentation and proof that your business model might work. The phrase “hindsight is 20/20″ would be the way to talk about that. Pick any new business idea and coming up with Analogs and Antilogs would not be easy – but its definitely a great guesstimate tool. The thing to keep in mind is not to get stuck into that frame of reference. Great companies evolve because of that smart everyday decisions that they make. If Nokia a company that made rubber boots can change its business plan and get into Mobile phones – probably throwing every analog and antilog along the way – you can imagine what it’d take to stay in business.
But I digress from the topic.
The fundamental point to keep in mind is that most product companies build things that do not polarize. They are incremental luxuries for our everyday lifestyle – and the market can live with or without them. Thats the danger when building a startup and trying to evolve the model with the market.
So What are the options:
Measure, Measure, measure.
Define things beyond just sales figures. See how people use a product, see what they use in the product. Use every bit of the product – even if its a final product – as a prototype in the hands of the user to define the next product.
Build Products that do polarize.
If 5 people say your product is awesome, and another 10 people say it sucks, revel in that fact. See if you can find more of that 5 people, and if thats a sizeable market. if they really love it, and if it becomes a cult, it will turn into a revolution – heck look at facebook, whoever wanted to put their entire life online in the first place? If the “Cult” or as they call “True Fans” really loves your product, the rest will follow. Apple is a prime example of how to build products for true fans.
Innovation doesn’t come without some failing. Every awesome company out there usually has failed in their first product – despite the fact that they knew their market, had the vision, the money and knew how to design a product. This will require a few retries, so be ready for it. Its all about being open to iterate – maybe even from scratch.
… all said, there is still a fine chance that most probably the market will say “Maybe”. In which case, its time to cut down some features and upgrade a bit to get to your truly true fans.
Further Reading: The Concept of “Social Proof”
Good one, but I think twitter, facebook, etc. were also incremental luxuries once upon a time, but we just can’t live without them now.
I think most of the startup ideas/products are incremental luxuries which slowly grows in us and becomes a necessity when you get people to like your product. Thoughts?
Well put Vijay. We do tend to get carried away by ‘our’ passion for the product that the customer is often marginalized – or worse still, ignored.
Need to check on ‘Analog and antilogs’ from the book, but what we need is an Antidote.
Sadly, there is no one-size-fits-all cure.
Vivek: I quite distinctly remember not wanting to ever be part of twitter. It was quite a big leap for me to jump into it – I accept, though with a bit of embarassment that I wasnt an early adopter of microblogging. I think we who are seeing new web products launched everyday are now just used to seeing strange, whacky ideas. if you want to test the theory of non-incremental products, it takes the generation test. Talk to your mom or dad about it and see what they say. The *blank stare* says it all usually
@Pravin: Sounds like an academic endeavour. We usually have a lot of debates within IIT as to the difference between academia and Industry – the prime difference is supposed to be “what you want” vs “what the customers want”. Ofcourse they want to not agree with me
Still getting “screwed” but not giving in or up. Nice article.
Madhu, You should read Seth Godin’s Book “The Dip”
The issue is that customers are even more opposed to change than most businesses are. Until they see a real (not hypothetical) product show up that actually satisfies their needs. So entrepreneurs need to decide what it makes sense for the market to support and what customers will want before they do.
Getting “No” is good as the customer may have said so not because of the product itself, maybe because of the price, or the packaging or the way he was marketed to.
The biggest challenge is to engage the customer in a dialogue and get his feedback. He may not buy the product right now, but does he remember the name of the company selling it.
@Smith: You do have a point there. Unless you have that perfect “contact” with the customer, yep its hard to persuade him/her.
@Indus: Building a reliable customer channel – apart from the Web – as a business in India is very challenging. But yep what you are defining would be the utopia.