I was interviewing a brilliant and successful entrepreneur who told me about one of their early failures:
"I worked for three years on this product, only to find out no one was willing to pay for it."
The product was an app that kept personal documents secure, without the security risks customers may encounter on Google Docs or Dropbox, and their focus was on immigrants that had multiple immigration documents they had to keep track of.
Early testing showed that people loved how clean the design was, and appreciated having their documents secure. But the founder soon realized it wasn't enough to make them take the leap and pay for yet another subscription.
For the target customer, the extra security on their personal information was a nice to have, not a need.
I’ve had many conversations with entrepreneurs over the years and versions of this story come up again and again.
Were those entrepreneurs really that out of touch with their customers? Were their products missing anything important? After their early failures many of these entrepreneurs went on to build successful companies, so what did they learn?
I could see a pattern emerging.
These entrepreneurs were all ignoring an important part of the process: first, understand the customer’s needs. Then, develop a product that solves the customer’s problem. But how?
What is product market fit?
Product market fit is the degree to which your product satisfies a strong market demand.
Creating a profile of your customer is one of the first steps you can take to understand market demand, exploring the overlap between customer needs and how your product offers a solution.
How to put customers needs at the center of product development
Whether you’re developing a B2C or B2B product, understanding what your target customer values, what their pain points are, and how your product can make a difference in their lives streamlines the product development process.
Lead with data, not assumptions as you build an ideal customer profile
Envision your ideal customer. This person understands the problem they have, but may not know exactly what they need to fix it. Your job, as the person selling them a product, is to precisely describe that customer’s need, building connections to how your product fulfills that need.
Forbes has a template to help you develop your ideal customer profile, and it’s this framework that can help you get closer to creating a product people will not just appreciate, but spend their hard earned money to buy.
With the example of the founder at the start of this article; if they had gotten more customer data and done deeper market research, they could have found out way earlier their ideal customer wasn’t willing to pay for another platform to store their documents just for the added security.
Identify competitors both inside and outside your niche
No matter your industry, the competitive landscape is always changing. And if you aren’t keeping an eye on your competitors, you’re missing out on some juicy market research and potential blindspots.
I had first hand experience with this at SafetyDocs Global, the company that I founded. We noticed that there was a well funded startup with a product that supported the same ideal customer we had, but they were addressing a different customer problem.
While we focused on the workflow software for permits and licenses, this other company was helping clients more easily obtain licenses from government bodies. There wasn't any early indication they would try to compete with us directly, but we watched them closely.
We were able to work with our sales and marketing team to prepare for the competition because we watched their movements, as they created a platform similar to ours.
There’s a lot to learn from your competition and companies that have the same target customer. In fact, doing a regular competitive analysis sets up an interesting thought experiment.
What could you build or adopt for your own product, based on feedback and/or complaints from your competitor’s customers?
Identifying your competition in business helps you understand the options customers have in the market and identify market gaps.
It also helps you better understand how your product overlaps with others in your industry, so you know how to navigate conversations with customers about choosing you over the competition.
Test, build and iterate product features as you go
Building a company is an exhilarating and scary journey. You pour all of yourself into the project, but you can’t truly know if your product will address the customer’s needs until you put it in their hands. And the sooner you do, the more customer data you’ll have to inform new product features.
So when is your product good enough to be rolled out to customers?
Alpha or Beta testing allows you to test your product with real customers right away with a small group of people that fit your customer profile. You won’t feel like your product is 100% when you start your beta test, but the point of this limited release is to learn from your potential customers and get their feedback.
You may expect one specific part of your product to resonate with customers but find that it’s another side of your offering that drives people to purchase.
There may be other features altogether that make them stick with your product in the long run.
Getting real customer feedback can help you make informed choices on what needs to be done for launch, stopping you from continually pushing back the launch date, losing resources and increasing stress.
Not all feedback is equal.
That said, not all feedback is equal. Collect feedback from at least a dozen people before compiling the feedback, deciding what could be implemented, what feedback is unrealistic and what feedback is irrelevant.
Your first reaction might be to dive right in and apply every single thing in this article at once, or feel overwhelmed and keep the tab open until you accidentally close out your browser.
Instead of following either of these paths, I suggest just taking it one step at a time.
Pick one of the strategies above, and if you’re new to business, use it to get a clearer picture of your ideal customer and the product you’re building.
If you’re already quite far in your journey, revisit your product considering these steps, and use them to develop your product further.