Shaping the Market to Your Product
Shaping the Market to Your Product
By qualifying early customers for your product, what are the benefits and who should follow this approach
Welcome to the 35th edition of The Discourse. In this edition, we’re going to talk about how to qualify early customers for your product. It’s something that more and more startups are following these days and is helpful to carve out your niche. Enjoy this one!
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"Build something 100 people love, not something 1 million people kind of like." - Paul Graham
We’ve all read about adapting the product to the needs of customers. But what if we select the customers that match the product? It may seem counter-intuitive, but that’s a better way to build a product. Let’s take a look at how:
How does it help?
Feedback from the right customers
Once you’ve figured out the target persona, by selecting only these customers you ensure that you only receive relevant feedback.
This allows you to act on feedback that will improve the product for this persona. And as a result, you avoid getting pulled in 100 different directions.
Scarcity Marketing
Your product is the nightclub. Qualifying the customers is the bouncer.
By following this behind the velvet rope approach, you can create artificial scarcity driving up demand for your product.
If it’s in the B2B or prosumer space, you can pick and choose first users from top companies. Now, you have top logos to add to your website.
Improved Metrics
Your product is actually celebrated because you are solving a genuine pain point for the target users. This results in improved metrics like PMF score, NPS, and so on.
Organic Growth
After completely satisfying the first 100 users, they tell people similar to them, and the market size increases organically.
What are the examples?
Superhuman (Premium Email App)
It’s been covered in detail in this edition where Rahul Vohra spoke about customer qualification and re-segmentation.
He proposed to assign a persona to each of the respondents and segment the users - these are the people who really love the product, and called them High Expectation Customers. These are also influencers and tastemakers.
Next, narrow the market to the most loved segment, which in the case of Superhuman was Founders, Managers, and Executives. He calls this process Resegmentation. This impacted the metric to go from 22% to 32% and eventually to 58% in a span of a few months.
Otter - a platform that connects parents who need childcare with stay at home parents who can care for their kids.
As much as customer discovery is important, the anti-customer discovery is more important. When any one signs up for what you are building, start engaging with people before they start using it to make them a qualified beta user.
Matter - a social reading app for articles, blogs, and newsletters. Currently, in private beta.
How do you do it?
First, identify the target persona for who the pain point is so deeply felt that they’ll really look forward to your product.
Before you launch, in addition to just a waitlist, add a form that captures more detailed information from the prospect.
Most examples that I've seen are usually Typeform.
Ask them questions on:
The Problem
Time spent on the activity
Actions taken per day
The biggest pain point
How are they solving the problem currently?
Pie in the sky solution
Is it really a problem?
Willingness to pay
Their Platforms and Devices
What platforms are they on?
What device do they use?
Social Proof
Company
Position - to identify if they're a decision-maker/influencer
Who can do it?
If you're in early access
If you're not under pressure to grow revenue too fast before you get product-market fit
If you have enough clout from your previous startups or the audience that you have built or have a strong reputation
Who should not do it?
If you're not sure whether your product will be superior to others. The value should live up to the hype. Although you can use the time you gain by slowly releasing to the public to improve the product
If you're running out of funds
If you're selling only to enterprises
Further Reading:
The value of a velvet rope - Gaby Goldberg
Building a Superhuman growth funnel to find product-market fit - Typeform
Onboarding template in Typeform
📘 Read of the week: Substackerati
That's it for today, thanks for reading! Press the ♥️ button if you liked this edition. Have any questions? Reply or comment below, and I'll be happy to answer them.
Talk to you soon!
— Kavir
P.S. Share this with a friend if you think it’ll be helpful
I was asked about why not to follow this approach when selling to enterprises. Here's what I had to say:
I think where I was coming from was that this approach was more suited to a B2C or bottoms up B2B customers. If you're planning on selling to enterprises and considering that sales cycles are long and customization always happens — qualifying on the pain point might not be the best approach. You would rather qualify based on size of company or the designation of the person reaching out.
It's just pragmatic thinking. Having said that, there's no reason why you shouldn’t try it out.