The race to Product Market fit
No rush. Have patience. Align your compasses, then make the dash and make sure you don’t run out of cash. This piece talks to founders and project owners launching new products & services and that burning question that always gets overlooked in the initial rush and excitement. TL;DR at the end.
New ideas and failure rates
This experiment has been running for a while now, far and wide, and the reports are clear. Most startups fail! Whether it’s a new initiative in an established company, a tech startup, or projects in the FMCG space, failure rates are pretty much the same.
Why is that the case?
The teams are building products & services which no one would even bat an eye for and they simply run dry of cash in an attempt to figure this out.
Building projects ground up is always a hit or miss proposition and it’s not hard to imagine that failure just might be inseparable from innovation. Starting up is rife with complexities but can founders get good at it?
A story on repeat
This story plays out very often around us at Non Zero…
Founders, at various stages, approach us to get their product designed(UI/UX), and brand & communication pieces built. Similarly, those in consumer goods come to get their brand, product & packaging, and content developed.
Once the designs and the communication pieces are in place, what entails is developing the product or taking the pitch deck and speaking to prospective investors.
In the excitement (understandably so) to build the product, founders overlook that very key piece of the puzzle we earlier spoke of…
Is it something a customer even finds value in?
If no one finds value in the product, all the effort of the prior months that went into building the product goes to the drain.
In many cases, answering that simple question will be cheap and easy. Developing and manufacturing the whole damn product is none of those.
Investors would also reasonably want to see traction or some kind of validation of the idea so not having interested customers translates into a rejection.
Not testing the value proposition with your audience early on and going ahead building a full-fledged product might not be a good plan. Especially when things can happen otherwise.
Challenges & Mindset/Framework
This initial idea is based on many assumptions.
A big one for our concern is the problem-solution assumption. We believe that there exists a problem and we have the right solution for it. If you channel your inner Sherlock (or Enola if you so prefer) through you for a moment, you’ll realize that there are two assumptions in the prior statement, one, whether the problem really exists and the other that you have the right solution for it. Testing these assumptions as cheaply and fast as possible is the name of the game.
Almost all pre traction pitch decks we’ve designed for startups have gone through drastic changes once they were pitched to a bunch of investors. Being too attached with the first idea might slow you down as well.
Is there a sensible way to go about building your Version 1 of the product?
The workaround is basically testing out your product idea with digital prototypes, ad smoke tests or 3D printed mockups and start talking to your customers. Get the feedback in and decide how to use it to further the project. The more experiments or iterations you run, more are the chances of finding a problem-solution fit.
At Non Zero we work with idea and early stage startups to do just the same where we help them build a package with which the founding team can test their initial product and approach their investors. We realize that time is of the essence here, and work in sprints to cover all the necessary requirements.
Our approach is to help startups save time, effort, money and misery by answering the hard questions early on and enable them for their next big moves.
Hear some people talk on this matter…
Kunal Shah (Cred & Freecharge) in this clip (@20:50) talks about how he tested the idea behind Freecharge in the early days and only once many consumers showed excitement for the same did they go out and build the product.
Justin Mares (Kettle & Fire) talking about how he used smoke tests to validate his idea around creating a brand that sells bone broth.
Satyaki Ghosh (Director Consumer Product, L’Oreal) here talks about why Maybelline had a tough time bringing their beauty products to India and how talking to customers (@12:20) surfaced some key insights that helped create the Maybelline kajal pencil that eventually did record sales.
Eric Ries (The Lean Startup) says the traditional and linear ways of developing product is a waste of precious energy and talks about how he learned that building a single page website with a download button in 3 hours and showing it to customers would have given him the same learnings which 20,000 lines of code written in 6 months did.
Michael Seibel (Twitch & Y Combinator) here breaks down what an MVP i.e. minimum viable product is. He says it’s the first thing you give to your first set of consumers and see if it delivers any value to them.
TL;DR & Takeaways -
- Most startup ideas fail because their teams are building products & services which no one would even bat an eye for. Is it something a customer even finds value in? is the question that should be answered as soon as possible.
- Falling in love with the idea, a bit too soon slows down teams.
- Every initial idea has a lot of assumptions so find cheap ways to test them out.
- Not adopting a mindset of experimentation and not testing your assumptions early on costs a lot of time in the long run. Optimize team activity to iterate and act with speed.
- Trying to launch the perfect version of the product in the first go might not be the best idea.
- Not prioritizing (spending disproportionate hours in the thing which don’t need attention right away is a big trap, making extensive business or software requirement decks, spending hours to choose the right tone of green are a big no-no)
- Building a startup is complex problem solving so keep the action list simple and prioritized. Keep building and keep testing!
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