Hi-tech start-ups are primarily driven by technology enthusiasts – someone or some group has an idea and away they go. Their focus is on the technology – building on their collective vision. Their tendency is to add to their vision as they encounter potential customers – building the product and expanding their target market as they go. Unlike companies beyond this stage, start-ups do not have the luxury of leaning on a customer base for information to drive the direction of the product. Unfortunately by using this ad-hoc way of managing their product, start-ups ingrain these habits into their everyday processes. As they grow up and suddenly have to juggle customers as well as expanding into markets, these habits become a serious limitation to being able to operate at their best.
But despite the lack of a customer base, start-ups need product management. Product management is about determining what’s important to build; who you are building the product for and when to roll out the capabilities. Start-ups have limited resources so in order to gain the biggest bang for their development dollars, they need to understand what to build first, then second, third, and so on.
Product management is a collection of many activities – from strategic to tactical and from business to technical – the breadth of which can be overwhelming. But there are 3 key activities that are critical to setting the right product management tone in the start-up company.
- Differentiation – identify and articulate how you are different than any alternative your target market has. Maybe you have a direct competitor, maybe you don’t – the point is that your potential customers will compare you to alternatives (including the status quo). Your differentiation needs to be based on your core competency, but must be articulated from the perspective of your target market. How uniquely do you solve the markets problems better than any alternative?
- Market Problems – identify and articulate the market problems that your product addresses. These need to be from the perspective of your potential customers – not from the features in your product. When you are in front of a prospect, they will resonate with the problems your product can solve – not with the features you have. Once you’ve identified and articulated the problems, prioritize them. This will focus your scarce development resources on building the most important features and capabilities first.
- Value Chain Mapping – your product will touch a number of different people or entities as it is deployed and used. You need to identify the value every single person or groups of people or entity will receive from your product. In some cases it may simply be monetary – in other cases it may be usage oriented. If your product does not provide visible, measurable value to everyone in the chain, then someone (group or entity) will not be a supporter of your product – potentially blocking the sale.
And lastly – validate, validate, validate. As a start-up this is tough. Maybe you have a few people in your industry that you can call on – so long as they are respresentative of your target market. Maybe you have some past experience. Maybe you are lucky enough to have a small sample of customers – word of warning, a small sample can skew your findings, so be aware. The point is to get out to as many people that are in or a have a vested interested in your target market to get feedback. To paint the best picture for your audience have a prototype to show the key concepts and a presentation to describe the entire offering.