Timing product launches, when to target corporate clients, and getting quality feedback
Three breakdowns of advice I gave last week
Last week, I had over a dozen calls in my Dr. Market Fit Office Hours.
In each of these sessions one key problem and insight emerged
Today, I share three breakdowns of advice I gave on topics which I feel are relevant to many founders.
Let’s go! 🚀🦄
All stories are shared with the founders’ permission.
1. When to target corporate segments
Situation
Chainfill, a startup that uses AI to automate logistic document processing, is doing paid pilots. They are doing so well, that they entered the double digits in terms of customers. When looking at the segment that bought, they only saw SMEs and not corporates, where they knew the big bucks are. Should they shift?
What’s going on?
SMEs, in some cases, can be low-hanging fruit compared to corporate enterprises. Corporate deals can take 12 to 24 month,s and once they land consume your entire operations. Is it something you can handle? Next, you don’t decide who your beachhead market is, they do. Perhaps you are too early for them.
My advice
Even though your endgame is a big market, having a niche will help you get initial traction. You are not reducing your potential; you are improving your momentum. It can be beneficial to conquer that SME market first, which will show your track record that can convince the corporate clients.
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2. Improving feedback quality
The involved startup asked to remain anonymous.
Situation
A consumer healthcare app has close to 200 paying subscribers. The team wanted to improve the product, with a focus on improving retention. Therefore, they emailed their users for feedback, but only got responses like “This is great!”. No detailed feedback.
What’s going on?
Praise is good, but it doesn’t give you direction. Emailing is often not the best way to get detailed feedback.
Advice
You need to actually talk to your customers. Don’t email asking for feedback; ask for their time. Your paying users should be able to give you 10-15 minutes. Sometimes you can offer something in return (free month of subscription, gift card), but often that’s not needed.
3. Timing of a big product launch
Situation
Avue, an AI-powered tool that allows to locally search on photos’ implicit qualities, had five pilots running. People are extremely enthusiastic: the tool could potentially save multiple FTEs for tasks everybody hates. Great news. After such a successful pilot, the team wanted to work on a big product launch to attract customers.
What’s going on?
I asked about whether the pilots were paid. They were not. Therefore, a product launch might lead to having a ton of traffic that doesn’t convert because the price is too high.
My advice
Make sure your revenue model is more or less clear before trying to get traffic with a product launch. After 3 to 5 customers pay the full price, you want to increase traffic. Go launch.
Thanks to the founders to allow me to share their stories.
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"they only saw SMEs and not corporates, where they knew the big bucks are. Should they shift?" - such a common challenge! At Notion.vc we recommend staying uncomfortably narrow on the flywheel that's working, where the product on the shelf ships & gets the customer value fast & where NPS is high. There is an in parallel - have someone research & collect data the adjacent segment ie size &or sector &or geo. So you're essentially winning & gaining a halo effect in a really tight market & product definition whilst scoring new markets with someone else in the team who won't get confused. That's my typical guidance 🌟