The start-up landscape has changed dramatically in the last few years. Earlier, making a product, a prototype was a tedious and long drawn expensive process and so competing based on the product was the only barometer of success. The times have changed now and building a product is cheaper and faster which changes the whole dynamics for a start-up. Enter a new variable in the success formula that differentiates a start-up from its peers – solving a real market need.
According to CB Insights, 70% of funded startups fail before break even or next round of funding and 80% of the reasons are related to markets and people.
In case you missed Accelerate OTT this month, Sean Sheppard Co-Founder, GrowthX, a boutique innovation advisory firm presented an eye-opening session (see video below) that included key start-up lessons on market discovery, messaging and execution. Sean is a five-time selling founder, venture capitalist and top 20 sales influencer who has successfully grown dozens of early-stage companies across a wide variety of products and markets. Here are the major takeaways from the session:
Look for Mr. Right Now and not Mr. Right – In most cases, products go through several iterations as a start-up grows and scales. In chasing an ideal customer, they usually shun perfectly good customers who might need their product now. Sean suggests that start-ups must make sure that instead of chasing the ideal customer, they should be prioritising their ideal customer and understanding the first profiles to execute against. This can be done by doing a thorough review of all customer account data, identifying patterns, analysing revenue potential and the likelihood of winning.
Seek First To Understand– With entrepreneurs all around us, we all have heard the promise that their new ideas will create the next Amazon or Shopify. Most of the focus goes into creating a new technology and process. Sean explains that it is equally important to understand that why customers buy; how they buy and who makes the decision of buying? As an e.g. a B2B product is usually bought for making and saving money, creating a competitive advantage or for avoiding a risk and the buying decisions would start with recognition of needs, evaluation of options and resolution of concerns. Also, within a company, there are different types of buyers like the end-user, technical buyer, economic buyer etc. It is imperative that an entrepreneur understands the granularities of the reasons of buying, buying process and practical constraints/motivations of different buyers and in the preparation of starting a conversation with a prospect.
Nail Your Conversation Framework-Sean opens this topic with a powerful sentence that has stuck with me, “You earn the right to the first meeting with your prospect by doing your homework right”. The prospect does not owe you anything and the onus of a meaningful conversation starts with you as a founder/owner/entrepreneur or whatever you call yourself. At this point throwing away your script is a good idea in exchange for a real connection with a well-researched framework. Sean talked about SPIN Framework wherein you gather the background, explore dissatisfaction, link isolated problems and imply a need for your solution. Remember that there is a subtle play of art and science here and the last thing you do is demo your product!
Sean Sheppard is a pure genius when it comes to transforming a technical product into a real-world product that customers will actually use and rave about.
Watch Sean’s presentation from Accelerate OTT:
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