In today’s digital world, consumers are more discerning than ever.
Bad user experience, or a product that simply misses the mark, will lead your users to flock to your competitors in a heartbeat.
The best way to avoid that nightmare is to focus on your product from the get-go.
It’s something we advocate at Altar, and we’re not alone.
In recent years, startups have been putting more and more focus on product, showing an increased demand for product managers as a result.
While developing a recent content series, The Startup Journey, I sat down with a number of entrepreneurs to discuss their startups.
I’ve taken a lot of lessons away from these conversations and today I want to share seven key takeaways specifically on product.
- Know Where Your Product Is & Where It’s Heading
- New Products Must Show Immediate Value
- Keep Things Stupid, Simple, Crystal Clear
- Be Prepared to Pivot if Needed
- Don’t Build For Your Market, Build With Your Market
- Focus on a Space You Have Experience In
- Don’t Underestimate the Importance of a Strong Product Team
1. Know Where Your Product Is & Where It’s Heading
It was during a conversation with Christian Nothacker that this first lesson came to the forefront of my mind.
We were discussing his fintech, PrestaCap. His startup focussed on helping small business owners overcome major inefficiencies when in the financing process offered by traditional banks.
He heard stories of small business owners queuing at the bank with paper applications and having to wait five days for a response.
Banks had fallen asleep at the wheel. So he stepped in, digitalised the process and built a better solution:
“If your product is no good your clients will eventually go somewhere else.
It’s very important to know where the product is today and the direction in which it’s heading. If you don’t know these things, it’s extremely difficult to keep your product relevant and up to date.”
It was this focus on product relevance that led to PrestCap being successfully acquired in just five years for $20M.
2. New Products Must Show Immediate Value
Our attention spans are getting shorter. Studies show that the average attention span of an adult is shorter than a goldfish’s at around eight seconds.
It’s critical, therefore, that you show your users value as quickly as possible.
Something I recently talked about with serial entrepreneur and product expert Joe Procopio. Here’s how he put it:
“Your core product has to give the customer a quick understanding of why they need your product. And it has to do this flawlessly. Remember your product won’t work if your customers can’t see any value.
As you build your product, focus on providing the most value with the least friction.”
In other words, ensure you build features into your product that pique your users’ interest quickly and effectively.
And, importantly, communicate it clearly.
3. Keep Things Stupid, Simple, Crystal Clear
As a company, when we talk to entrepreneurs about building an MVP of the first iteration of their product, we always begin the process with a simple exercise:
Creating an elevator pitch to sum up the startup’s value proposition.
We do this because the first step in providing users with “the most value with the least friction” comes in the form of sharing your value proposition with them.
Something Jan-Philipp Kruip and I discussed recently. Jan-Philipp founded FitSense, a B2B health and fitness fintech startup that is being used by some of the biggest multinational insurance companies in the world.
When I asked him for his advice on product, he told me”
“Focus on getting the value proposition incredibly clear. If your grandma doesn’t understand it’s probably not clear.”
Crafting a clear message on what you’re trying to provide takes a lot of time. But it’s very important.”
A clear, well-communicated value proposition will help you in a number of ways.
Firstly, it will entice your early adopters to use your product.
Secondly, if you begin to get lost in a sea of features you’d love to see in your product, your elevator pitch can serve as your north star.
If you ever question if a feature will prove useful, you simply need to refer back to your elevator pitch to quickly know if it aligns with your value proposition.
That being said, you won’t necessarily nail the value proposition the first time around.
You may find you need to pivot to succeed.
4. Be Prepared to Pivot if Needed
It was in a discussion with serial entrepreneur Yaron Samid when this particular lesson came to light.
He founded BillGuard, a multi-million dollar fintech startup.
The first iteration of BillGuard was a “set & forget” security app that identified fraudulent activity on your credit card.
And while Yaron and his team received interest for this product, no one seemed to be bothered enough about the problem to take action.
More than that, they had issues with their CPA. The solution? They pivoted the product:
“Early on, we realised our Cost per Acquisition (CPA) was going to be too high; so we pivoted to a B2B model. We tried to sell the technology to the banks.
However, the sales cycle for banks is very very long. It’s painful. The kind of pain I wouldn’t wish on anybody.
Simply, we were not set up to just sit there and wait for the banks to deploy.
So, after two years of investing in a B2B marketing and sales team, with pilots in major banks, we made one of the hardest decisions we had to make. To pivot back to a consumer app.
This meant letting go of some amazing talent we had brought in to sell to banks. They just weren’t the right fit for a consumer business model. It was heartbreaking.
We completely redesigned the product and built a personal finance app as opposed to a “set & forget” security app.”
It was these pivots that led them to success.
That being said, not every successful startup needs to pivot. Take the entrepreneur in the next lesson for example.
5. Don’t Build For Your Market, Build With Your Market
When Illit Geller told me about her startup, TradAir, you can imagine my surprise when she told me she didn’t start the business with a specific idea in mind.
Instead of brainstorming ideas, she and her founding team went out into the market and talked directly to an industry they knew very well, asking for their biggests pain points.
She told me how it was this tactic that led to the initial success of the product:
“It’s important to be out in the market and talk to the actual players to have them as true partners in your product evolution.
That’s basically what we did.
And, because we developed our fintech product with the market, in partnership with a bank, the initial release of the MVP was spot on.”
A good strategy if you ask me. In its most recent funding round, TradAir raised $11M.
But it wasn’t just the people she talked to in her chosen space that led to Illit’s success.
It was her deep knowledge and experience of the industry she was tackling. This leads me to the sixth lesson on the list.
6. Focus on a Space You Have Experience In
There are no two ways about it. Your chances of success are higher if you have some knowledge and experience in the industry you’re going into.
Something unicorn founder Alex Tonelli is a strong advocate of:
“I can’t emphasise enough for new entrepreneurs the concept of starting halfway there.
You ought to be careful when it comes to the products and the problems you dive into. Having authenticity to a problem is paramount.
People can get stuck into this religion of Lean Startup and convince themselves they can learn about any problem and build the perfect product to solve it.
Simply put, it’s not that you can’t build a successful product in a space you know less about – but it’s going to be a lot tougher.”
More than experience in a chosen industry, you should have some knowledge of product theory and reasoning. And if you don’t you should consider onboarding someone who does.
7. Don’t Underestimate the Importance of a Strong Product Team
In the excitement of building a startup, it’s easy to get carried away. Especially when it comes to the features you build into your product.
This can often lead to a snowball effect, where every new exciting idea gets thrown into the development pile to be built as soon as possible.
Suddenly, your product is getting bigger, more confusing and less valuable.
A product team can be a great gatekeeper to avoid this headache.
In a recent conversation, serial entrepreneur Garrett Gafke summed up the importance of product people perfectly:
“A good product person will hear someone from the company say:
‘We need to build this feature for the platform, it’s a must-have!’
And turn around and says things like:
‘Great! Is it deployable across all customers? Is there revenue to be generated from this feature? Does it help to improve the users’ experience?’
It’s really important to lay the foundations of a great product team so you have that point of view. It ensures your product truly serves your users.
Remember, nowadays, it’s simply not enough to recognise an inefficiency and build a solution you think people need.
You need to be able to show your vision and tell your story so well that people don’t just understand it. They feel it, recognize it and ultimately internalize it.”
All of this to say, don’t underestimate the importance of a product team when building your startup.
In today’s business landscape, where a short time-to-market is vital, it can be tempting to jump into the development stage as soon as possible.
But there’s no point building quickly if nobody actually wants what you’re building.
Instead, take a breath and focus your attention on structuring your product reasoning.
Taking the time to do this now will increase your chances of a successful launch in the future.
Thanks for reading.