Is Your Startup is Stuck? 3 Ideas to Get Back to Growth
20 Ideas in 20 Days — Day 14
(Hint: It’s not adding more product features.)
You’ve got a working product, a solid group of early adopters and you’ve raised a little money. But you just can’t get the traction to get to the next level of growth or funding. Does this sound familiar? If so you’re not alone.
This is a recurring theme among early stage startups. And usually the impulse reaction is to try to “fix” the product. So the startup uses whatever runway they have left to improve onboarding or add this or that “must have” feature. Sometimes it works. A lot of times it doesn’t. Why? Because the product isn’t the problem.
If you find your startup in this situation, I suggest you look three other places before you assume it’s a product issue. Your time and resources are precious. Focusing on the right thing is the only way you’re going to stay in the game.
1. The Problem
Go back and take a hard, long look at the problem that you’re trying to solve. How have you defined it? Is it too narrow or too broad? Are you sure it’s a problem that gives a large enough audience a big enough headache to pay for a solution?
Make sure: Without your demo product, have at least 10 conversations with target customers who are not using your product now. Do not tell them your solution. Ask open ended questions. What is your biggest challenge when you X? How does that challenge impact your work or your life? How are you solving/working around that problem now? This might be a great place to use some Design Thinking strategies. Is there a way you can observe your customers dealing with the challenge? Be quiet and take notes. I promise you’ll learn something new about the problem.
Can you use the new insights about the problem to reevaluate your value proposition and gain additional customers with the current iteration of the product?
2. The Solution
Many founders start with an idea rather than a problem. Then, following Lean Startup principles they quickly build an MVP and get feedback. The potential pitfall is that while your idea may be a solution, it may not be the best solution. Evidence of this is when a bunch of early adopters jump on board but then things stall out. In this case, adding features is unlikely to spark more rapid growth.
Make sure: You’ll need to get out of your own head for a bit so you should bring in some outsiders and potential customers. Again, don’t tell them your solution. Instead facilitate — or ask someone else to facilitate — a brainstorming session where you spit out all the ways — even the impractical ways — you might solve the problem. Hint: A best practice here is to give participants the problem ahead of time and have them start thinking about it on their own and preferably write it down so you don’t get caught in group think.
Can you build to a better solution?
3. The Customer
I have a friend that calls that first set of customers — the first market that you target — the first brick. For some companies, this is simply the market where they first started to get some interest — where they got an intro, or a market they know. But it may not be the “best” place to gain the kind of traction needed to get key reference customers or funding.
Make sure: Start by talking with the people currently using your product. How do they describe the value it adds? What does it help them do faster, better or for less money? This is not the time to make assumptions. Get it in their words. Listen carefully. Is everyone using your product saying the same thing or not? Group the strong positives together. The people who are saying that your product fundamentally changes the way they do something. Can you define this as a segment? Is is more narrow or different then the group you thought you were going after?
Does it make sense to hone your targets?
These exercises will reinforce your solution, help you better articulate your value proposition, and focus your growth efforts. This is also great information to have at hand when you’re pitching.
I know it’s scary. What if you find out your solution is somehow wrong? (BTW, this fear is what keeps founders from doing this.) I think that even if you discover the worst, you still win. If you have enough runway you can use what you learn to craft a better solution and pitch that. Part of this process is backing up to move forward. Ask any entrepreneur (not a 25 year old panel pontificator but one with a little gray hair) and they’ll tell you about the times they got it wrong.
Bottom line. It doesn’t matter how many features your product has. If you don’t have the right problem/solution/customer set, your company is dead in the water.