OfStartups

Category: Product management

  • Product positioning

    How do you decide to purchase clothes from a particular fashion brand? How do you decide which laptop to buy? This essentially depends upon your previous experiences with the product, your thoughts about how the product is, and the things you have heard from others regarding it.

    city streets with outlets of different brands

    What is product positioning?

    Product positioning is the way in which you want to project your product in the market. It is the way in which your target audience sees how your product is solving their needs and how it is performing against the competitors. It is the thing that builds an image of your product in the customers’ minds. A successful brand positioning would be one that the customers feel is a valuable one.

    Consider examples of successful brands like Apple and Emirates Airlines. These brands are successful because they have presented themselves and are thought by their customers in a certain good way. Of course, the brand positioning will mean nothing if the product itself is not that valuable.

    Why is product positioning important?

    Simply, products are sold to humans at the end. And it is human nature to judge things. How you behave in the society creates your image. Your brand. And a good image is always respected. So is for a product’s image in the minds of the customers.

    Product positioning also defines how your product is doing better than the competitors. This is also a continuous check for a company to keep an eye on the competitors. It can be a guiding principle regarding how to update or build new products as the competitors get updated and the competition gets strong.

    How do you build your product positioning?

    Know your customer segment

    The first step is to have in-depth knowledge about your customer segment and customer persona. Identify the persona in the most low levels of detail. It can be done only by primary research by directly interacting with the target customer. It will help you in knowing about their choices, goals, influencers, and fears. Only after knowing the customers in detail will you be able to decide on the way to communicate your message.

    Know your competitors

    To position yourself in the market, it is essential to know about your competitors. If possible, it is recommended to use the competitors’ products. This helps to understand their strengths and weaknesses and decide where can your product perform better against them.

    Craft a unique value proposition

    After studying your competitors and finding where can your product perform better in a positive way, the next step is to actually put forth the value proposition of your product. An effective value proposition defines the benefits of the product to the target customers in a clear and transparent way.

    Put out the messaging

    After the value definition, it has to be communicated with the customers via different mediums. This is a case-dependent way which depends upon the type of customers and product. A consumer product might communicate the message through television advertisements. A real estate property might be communicated via newspaper advertisements. An e-commerce brand might do it through social media. This is where the first step of knowing your customer segment comes into the picture.

    Get feedbacks

    It is a difficult task to position your brand successfully in the first go. It is necessary to test your hypothesis continuously. Keep a continuous check on how well is your positioning working and adapt with the feedback.

    Brand positioning examples

    Emirates Airlines: Premium and luxurious flight experience
    Apple: Premium and state-of-the-art technology
    DMart: One-stop shop with the most affordable pricing

  • Value proposition

    Value proposition gives you the reason why you should buy a product. It is the promise made by the company that builds the product and is the main purpose for which a customer should buy the product.

    value proposition is the promise a company makes about the benefits to its customers

    What is a value proposition?

    A product solves a pain point of the target customer segment. The value proposition of a product is the end output that the customers get after using the product. It defines what is the end benefit that would be availed by the customers.

    Features are not value propositions!

    There is often confusion between the features of a product and the value proposition. Features are the means by which the benefit is delivered to the customers. The value proposition is the benefit itself.

    Consider the example of WhatsApp.

    The value proposition i.e. the benefit delivered by Whatsapp is easy communication. To deliver this benefit, it has different features like adding photos, videos, status, communicating in groups, and so on. But the value underlying all the features is only one – easy communication.

    How do you define a value proposition?

    Defining the value proposition is important, as it conveys a clear message to the customers regarding the output that the product is going to deliver. A well-crafted value proposition is crucial for effective marketing.

    Things to know before defining a value proposition

    1. Customers – Before anything, you should know who your customer is, in as much detail as possible. Narrow them down to the finest of segments. It can be based on individual or a combination of, but not limited to, industry, age, geography, gender, habits, etc. Knowing your customers keeps you focused.
    2. Pain point – What is the pain point of your customer? How intensely are they currently facing this issue? What are the present ways in which they are tackling this issue? This is The most important thing to know which will help you in building your product, and hence the value proposition.
    3. Cost-benefit analysis – When a customer is purchasing a product from you, he is going to measure it against the benefit that he is receiving versus the cost he is paying for the product. So you should know the cost-benefit analysis before presenting your value proposition.
    4. Know your competitors – There will always be direct or indirect competition for your product. Knowing your competitors will help you position better in the market.

    Defining your value proposition

    A strong value proposition is always customer-centric and defines how they are benefitting good from your product.

    1. Identify the main value of the product – Though there can be a number of potential benefits, list the one that is the most cared about by customers. Eg; “Increase your sales”.
    2. Identify your differentiator – List what differentiates you from the competition. This would give you an edge over others and provide a unique positioning in the market.
    3. Quantification – Add quantified data to the value proposition, so that it is easily understandable by your customers. Eg; “Increase your sales by 20%”.
    4. Craft a clear statement – After assessing the above points, craft a clear statement based on the learnings so that is is effectively communicated to the customers. Strong value propositions have crystal clarity about the benefit that would be gained by the user.
    5. Amplify – After crafting the value proposition, add it to all the possible customer-facing mediums to convey the message. It can be your website, brochures, presentations, advertisements, etc. Adding it to multiple places reinforces the proposition to your customers.

    Characteristics of an effective value proposition

    A successful value proposition includes –
    1. Clarity of the benefit to the customer
    2. Quantification of the benefit
    3. Relevant to the customer segment
    4. Removes any confusion from the customer
    5. Resonates with the customer’s needs
    6. Speaks the customer’s language

    The value proposition is an iterative process. After crafting, it has to be tested continuously among the target customer segment. As mentioned, it should resonate with the customer’s pain point and should have the customer’s language. You should always keep close monitoring on how it is performing among the customers, and based upon the feedback changes should be made.

  • Product market fit

    What is product market fit? 50% of startups fail because of a lack of product-market fit.

    no of startups failing due to lack of product market fit

    What is product-market fit?

    When a product solves a customer’s pain point and adds the required value, it has achieved the product-market fit. In simple terms, the product is benefiting the customers to a level where they are ready to pay for it.

    In most cases, startups build products that are not required for the market or the market is not yet ready for adoption, and hence fail.

    How to achieve the product-market fit?

    By identifying the pain points of a customer segment, defining the value proposition & testing it with iterative minimum viable products (MVPs), the product-market fit can be achieved.

    This is usually an iterative process with feedback from customers. If one solution doesn’t work, change the solution. If the customer’s pain point is not a genuine one, work on another problem. The faster you move on, the more the chances to succeed.

    The basics behind this are not to remain attached to your idea and to be flexible to provide value to customers until you hit a target!

    How to identify product-market fit?

    After implementation of the minimum viable product, customers willing to use it actively at first is an initial sign of being in the right direction. Some signs of getting a strong product market fit are – 

    1. Willingness to pay, 
    2. Active usage of the MVP
    3. Active feedback
    4. A smaller number of customers churned
    5. Increased interest from other customers

  • Minimum viable product (MVP)

    Post the prototype stage in the product development process, the minimum viable product (MVP) is meant to test of product’s ability to solve a problem.

    Making hypothesis

    A startup is nothing but a solution to a problem of a customer. Naturally, the starting up process starts with finding a pain point of a customer/s.

    When the problem statement is finalized, certain assumptions or “hypotheses” of the problem are made, upon which the validations are to be made. If the hypothesis is successfully validated, it can be further developed or associated with the final product. If not, the hypothesis gets rejected & new ones are built.

    Hypothesis testing

    These hypotheses are tested by minimum viable products or MVPs.

    MVPs can be as simple as a button in your existing web-based solution or newly developed “minimum” product. Depending upon the complexity of the hypothesis, the time required to launch and get results from MVPs differs.

    The sole purpose of MVPs is to test a product to the market in the quickest way possible before building a full-fledged one. Once the MVP has been successfully tested, the risk of failure is reduced and startups can go ahead with the actual development of the product.

    A lesson that I’ve personally learned is to keep the MVP bounded by time, along with features. This has helped us reduce the time investment.

    MVPs assure product development and enhancement with a minimum cost of money, time, and resources.

  • Breaking down problems

    Product problems can often be overwhelming. It is difficult to know where to start and visualize. Breaking down the problem into smaller parts and solving it one by one is the appropriate way to approach it.

    Know the “why”?

    The first step in breaking down is to know the “why” behind the problem which you are solving. Your goals and priorities are clear when you know why something has to be done. This can be identified with qualitative and quantitive research of data.

    Identify the core values for each “why”

    Often there can be multiple answers to why a certain feature has to be built. Identify what each part has to offer to the big picture which you are building. You will now have different blocks of the solution which now have to be prioritized.

    Prioritization

    Once you know the main purpose of why you are solving a particular problem and have broken it down into multiple value-offering blocks, identify the one part that is the most important one for solving the primary problem. It will normally be a dependency for many of the further enhancements in the product. Depending upon how the other blocks are contributing to offer the solution for the customer, the rest of the blocks have to be prioritized accordingly.

    Build-measure-learn

    Product development is all about being better than the previous day’s, rather than being perfect. Once you have identified, broken down, prioritized, and built upon the problems, continuously measure the results and take feedback. Translate the feedback into action items to gradually improve the product.

  • Problem space vs solution space

    The basis of any product is the customer’s pain point. Great products solve scalable problems in an efficient way. This is achieved when the customer needs and product requirements are addressed successfully. And both have to be given their own due respect while building products. The problem space and the solution space must be separated to clearly understand the customer needs and product requirements.

    Problem space – the Why

    Every individuals or group of individuals have a variety of problems. A market is a set of all the individuals or groups having the same problem. This can be further segmented into different groups on the basis of various parameters like industries, age, gender, etc. This is where the problem space is. Learning more about the users and their problems. According to the Lean Product Playbook, you cannot control the market. You cannot change the needs of the people. What you can control is the solutions that you want to provide for one or more problems. The problem space does not involve any designs or mocks or MVPs. A strong problem space is the base of a strong solution space.

    Solution space – the How

    Solution space is the actual implementation to solve a problem of any kind – an MVP, prototype, or wireframe. Unlike the problem space, this is a more controllable unit. For a given pain point, there can be a number of solutions that can be built. It depends upon factors such as cost, quality, time, and resources for which solution to be built.

    Why focus on the problem space?

    What is the significance of the product if it is not solving a crucial pain point? Building a solution is a costly affair. Though a skill of huge patience and takes a lot of time, identifying appropriate pain points and the users, to build a product is relatively less costly as it won’t directly involve material costs. Especially during the early phase of a product, more emphasis has to be given to the problem space.

    Simply put – when you do not get the knowledge of the appropriate problem to solve, it will end up in a solution that no one might want.