<![CDATA[I’ve been trying to understand why some startups leap through success once product/market fit is achieved, while others don’t. I don’t have a full answer yet, but some signals are emerging. A common pattern seems to boil down around the founder’s mistake of staying too close to the product and users, instead of starting to get closer to the business model. That’s the “product/market fit’s dilemma“, when it is not accompanied by a business model realization. Product success & market acceptance give you tremendous insights into your customers and markets, but with this multitude of signals, comes the challenge of sorting through it. Although you want to listen to all of this data, it will drown you if you act on all of it. For example, prioritizing feedback by acting on the most popular requests is a sure act of shortsightedness that doesn’t propel you ahead. What the crowd is telling you to do is typically obvious, and should be used to validate, not dictate what you need to do next. Reality is that most customers will give you incremental feedback, and that will limit your potential if you only listen to that. Their vantage point is selfish, often centered on making the product work better for them, but not always helping you solidify your business model foundation. Only few users will give you insightful or strategic feedback. And these may first appear as outlier types of feedback. But that is where you might find some silver linings. Your product adoption success was just a license to figure out your business/revenue model. The benefits of having market acceptance is that it gave you an added level of clarity and insight into the strategy required to get to your business model goal. So, use that post-period to get closer to the business model, instead of responding to incremental feature requests that don’t add-up to propelling you forward. Two scenarios at play here. Either the founder has a deep product vision, and they continue pouring resources on product development, or the product vision is lead by user feedback and excessive listening to it. Either way, at some point, you must stop iterating on the product, and start figuring out the business model. If you’d like to ask users for feedback, don’t ask them what new features they’d like to see. Rather, ask them which ones they will pay for, or which ones they can’t live without, or what will it take for them to tell 100 others about your product, or what you should do next as a company in order to be in business forever. Let’s review these 5 startups as case studies to validate my data points. These are real examples, but with a hidden identity:
- A startup has over 10 million users, and a pipeline of product requests, but the paid version features are not unique enough. Why? They listened too closely to their user feedback, instead of leapfrogging with something unique that no else has. Therefore, they are still vulnerable.
- This company has over 30 million users, yet the founder gets more excited talking about and focusing on adding additional features to a product that has already achieved product/market fit many times over. Why? The founder is too focused on realizing the last chapters of his product vision, while he has late at focusing on monetizing the model to solidify his ground before going further.
- This startup is approaching 20 million users and boasts an enviable user community that loves them, but the founder thinks every user on the planet is theirs to capture, and he’s not worried about realizing the business model yet. Why? The founder thinks they are safe because they are following user demand.
- This B2B startup is servicing more activity than the perceived leader in their market, yet they are relatively unknown in that space. Why? They are following the needs of their customers who want more of what they have, instead of stepping back and thinking strategically about how they can leapfrog their positioning in the market.
- This company has a loyal base of over 3 million users, is installed in several million websites, yet the company’s market message is more confusing than ever, and they aren’t able to act like the leader they are. Why? They are following the Lean startup method of iterations and product extensions way beyond its useful lifecycle, and the founder is late on optimizing their revenue model potential.
- Don’t let user feedback lead you. Users will give you a year’s worth of product revisions that will anchor you down, and won’t let you leapfrog.
- If you’ve got a ton of feedback, find the gems in that feedback that are springboards to a leap. Most others will weigh you down.
- Don’t keep iterating ad infinitum, past the product/market fit. Rather, start iterating on the business model, before it becomes urgent.