Repeatable Products

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Once you have figured out your minimum viable product and sorted out your segment, you get a repeatable product, and you know you are onto a winner. The test of a segment is simple: do things repeat without you having to change your product and change the way you go to market? What I mean by repeat is literally customer by customer: can you meet their needs, and as you repeat, does your product stay the same? If it does, you are onto a winner. You can keep moving the business forward without adding more cash, adding more engineers, or changing your marketing every time you go to market.

So you have found a couple of customers who want the product, and then you find five more who look just like them, and you can serve them without changing anything. Then you have something, and you can put the pedal to the metal. Sometimes, if the minimum viable segment is small enough and you are getting traction (especially with a product-led-growth model where it is free to try and orders just start coming in), you can raise money on that first shot, because you have proved you have something going, especially if you also have the expansion vision to go with it.

Something magical comes out of repeatability: reference. With one, two, or three customers who all have the same needs and can talk to each other and say “Yeah, I’m getting the same benefit as you,” you start to become known as the leader in that segment. Because it is small and well-defined, you can dominate it early and quickly define yourself as the market leader, a beachhead you can build off of.

The road map: feature to product to solution to company. Think about Greg: he had a technology breakthrough, a display made out of thin air. What if, in advance, we had written a road map: over the next several years we will turn that into a feature, a product, a solution for a particular marketplace, and ultimately a company with a business model? If we had set that road map up for him, life would have been easier, because he would have been constantly validating. For product people who say “I don’t want the business stuff, what does this mean for me as a product?”, it is basic: how do you get usability up front, how do you get partners and services and whole product into your product, how do you get the solution into the hands of referenceable customers, how do you get the market segmented so your beachheads get repeatability, and how do you then afford to bring in the next set of engineers to build a scalable, ultimately profitable product line? It is not more complicated than that; there is just a ton of execution in it.

Startup secret: always validate from the customer standpoint. You know you are on the right track if you always validate from the customer’s perspective. I sit in a lot of board meetings, and I am the most irrelevant person to impress there. Who cares what I think? I would far rather you came in and said, “Here are the ten customers who care about this,” than “We met our cash flow forecast.” Whether you hit your cash flow forecast is meaningless. What matters is that you are answering a customer need and proving you have moved from having just a feature to a place where customers are buying it repeatedly. So create the basics for metrics to validate along the road map that are external and customer-based: net promoter score, retention and upsell, or lifetime value, whatever you choose. If you have customer-based metrics validating your progress on the road map, you will know whether you are on track to build a feature, a product, or a company.

And remember the number-one thing I wish startups did more of: focus, and start as narrow as possible. People come in and say, “We’ve got this big market opportunity.” Delighted to hear it, but if you go after it all at once, it is like boiling the ocean. Most startups fail because they tried to do too much, and they end up contracting on failure. I would far rather you expand on success, even if it is one customer at a time. The most successful companies figure out how to build up from success on each of those problems that line up, one customer at a time.