There’s a time-honored Chinese proverb that the journey of 1,000 miles begins with a single step. But did you know that one of technology’s greatest recent success stories started with a “Tiny Speck?”
In fact, it was only about 13 years ago that entrepreneur Stewart Butterfield was knee-deep into the development of Tiny Speck’s first game, Glitch. To accelerate the process, he launched an internal messaging platform called “Searchable Log of All Conversation and Knowledge” – or Slack for short.
Though the game – and Tiny Speck – quickly found the digital dust pile, Slack stuck around – and became the ubiquitous and indispensable enterprise SaaS company it has become today. Pivots have given us some of the biggest names in the tech business – it’s how Confinity became PayPal; how Flickr evolved from a massive multiplayer game; and how an aspiring video-dating site became YouTube!
The lesson from these pivots is one that bears retelling today. You, too, may have encountered “Tiny Speck” syndrome in your own company – investing time and resources into market deliverables for a product that isn’t quite a fit with its target market.
This is yet another CEO blind spot that – if left unchecked – can turn potential performers into also-rans. In this, the third blog of our series, we’ll take a closer look at how to ensure a tight, puzzle-piece-like integration between your product’s promise and customer (or consumer) demand.
But first, a word of caution. In my role as a Chief Marketing Officer, I’ve borne witness as CEOs – inspired by gut feel or words of encouragement from a friend at the club – staked millions of marketing dollars on a good idea that didn’t find enough market demand. The results were predictable.
It’s a simple fact: Marketing and sales horsepower simply aren’t enough to overcome product positioning errors or competitive weaknesses. Further, if your market fit is less than ideal, you can leave the door open for a visionary competitor to swoop in and gain market momentum with the right audience with less funding.
There are four factors that need to be true to validate product-market fit:
With the proper fit, you’ll gain a more targeted audience that can be converted more easily – from which you can then move with greater ease through the outer layers of the “onion” to access a broader crowd. In your arsenal, you’ll tote along reviews, word of mouth, and referrals to help buoy performance.
However, if the fit is less than ideal at any stage, it will require a “Tiny Speck”-style pivot to achieve alignment.
If you are in the earliest stages of product development, you need to know just two words to ensure you will be on the right track to product-market fit: Customer Insights. Guesswork is out. Qualitative and quantitative research is the order of the day. With the accessibility of data and analysis tools, there’s simply no excuse for skipping this seminal step. You’ll understand whether there will be strong demand for your product by gaining deeper insight into market needs.
If you fail to connect with the consumer at this stage, it’s your absolute mandate to continue to iterate until at least 80 percent in a quantitative survey say yes. Remember, a survey is akin to a lab experiment for your product or service, so actual market penetration will be lower than this (pending the determination of channels of distribution, awareness, affordability and being in the right place at the right time). But 80 percent in a lab environment is a strong indicator that you’re on the right track – and you’re cleared to the next step.
With a mandate in hand from the research stage, it’s time to move on from the theoretical. Here, you’ll want to put your actual product in the hand of potential first adopters, one by one if necessary. It’s a hand-to-hand, manual-style type of outreach that will ensure that your earliest users are thoroughly satisfied and committed to contributing to your feedback loop.
From this beta stage, you hope that your testers will love what you’ve delivered and will deliver you natural referrals.
But, if you are not getting referrals and leads, or leads are slow to convert, you’ll need to diagnose whether you truly have a messaging or sales problem or whether the root cause of the company’s problems are product clarity or market fit.
Start by collecting loads of product feedback – everything from casual conversations to surveys and reviews. Use this as your foundation to iterate and optimize messaging until your offering starts to reflect the “shut-up-and-take-my-money” meme. You’ll have more confidence that you’ll achieve the accelerated sales growth and positive reviews you are looking for post-launch when you start spending money to scale.
In our next blog in the series, we’ll dive deeper into making sure that you have channel-product and channel-market fit required to achieve sales growth and success.
Links to other articles in this series: