December 15, 2017

Mistake #8 – Failure to Stay the Course, Reacting to Pressures and Temptations

I have too often seen and experienced cases where early stage companies are unwilling to put a stake in the ground about which markets they are going to focus on or they chase deals “opportunistically”, resulting in spreading their resources too thin and investing in opportunities that have little chance of success.

Some scenarios I have seen include:

  • The company started off with a well-defined market segment, but when sales didn’t start happening as quickly as they hoped for, they started second guessing their decision and brainstorming other potential markets and start spreading their efforts across multiple market segments.
  • Someone in the company identified a market segment that had strong potential upside, and even though the product was not developed for that market segment and there were well established companies already in that market area, the company ” opportunistically” chased after RFPs in that area, when in reality the chance of winning the RFP was very small.
  • While still trying to ramp up initial sales, executives or investors start throwing out other ideas of where the product might fit.  E.g., asking questions such as, “why aren’t we pursuing this opportunity or don’t you think that these people they might be able to use our product?”   Since the question (or perceived directive) is coming from someone in authority, you bend a little and say, sure, we’ll take a look at that, taking your away from your original focus.
  • Most commonly, though, is that the company thought they had a great idea and never did any market validation or put any thought into who would be the best target markets, so their marketing and sales efforts are like throwing spaghetti on the wall, hoping that something will stick.

Not defining and sticking to a clear target market segments creates multiple problems for the company.

  1. Early stage companies have limited resources and they cannot try to market and sell to a broad market and they can ill afford to do hit and miss marketing until they finally find something that sticks.
  2. Too often, the company creates a flurry of wasted activity as marketing creates new marketing materials, development adds new capabilities to the product and many people invest a number of cycles in chasing opportunities or responding to RFPs, all in the name of making it look like you have a product for a particular market or opportunity, but in the end, it is all for naught because you never really had a chance.
  3. You aren’t communicating clear and consistent messages to the market about who you are as a company and what you do.

Keep The Course

If you have diligently completed your market validation work up front and have continually validated the work with your target market segment, you should be confident in your decision, even in the face of heavy pressure pushing you or temptations pulling you into non-targeted markets, and stay true to course.

When to Change Course

There will be times when it is valid, and necessary, to change the course (or Pivot, using Lean Start-up terminology).  The key is that this decision to change course should be done with thoughtful consideration and evidence and not as a knee-jerk reaction to the above mentioned temptations and pressures.   The market can be fickle, and in spite of all of the hard work you did via market validation and by continually validating your approach with your target market, you may still miss the mark, since the markets true intentions and perspectives are only discovered once they actually have to put money on the table.

Here are some examples of situations that are evidence that a course change may be required:

  • The Pain (problem) the target market expressed was not nearly as critical as originally indicated and when asked to pay, they balk.
  • The problem is important, but there are other investment areas that are a much higher priority.
  • In the time that you took to get the product to market, market conditions have changed such that your product is not nearly as important as originally believed to be.
  • A competitor has beat you to the market and staked the claim of where you thought you were going to compete.
  • The Pain exists but your approach to solving doesn’t resonate with the target audience.
  • Any other execution issue on your part where you missed getting the right product for the right market (Product/Market Fit)

Steps to Stay the Course

  1. Do your upfront market validation work to ensure you clearly understand the problem you are solving and the target market with the biggest Pain.
  2. Continually validate your product development efforts with this target market until you have a Minimally Viable Product (MVP) that they are willing to pay for.
  3. Stay the course and keep focused on this target market until clear circumstances tell you to change course or that you are ready to expand your efforts.

 

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