Shape the DNA of your product by inventing how you’ll sell it
May 24, 2024 | Barrie Heptonstall
Most founders begin their startup journey with a flash of inspiration. Something in the world is broken, and they can’t stop themselves from fixing it. From that moment on, all they can think about is building — the focus becomes “what” we are building.
Sure, you can build a product based on “what” — but a business has to have “why” at its core. It’s the “why” that I look to understand when I’m considering whether to recommend an investment. I always ask to see their customer presentations and proposals, to see how they are explaining the “why”, and to weigh up whether it is compelling. “Why” is all about the value that the customer will get — and linked to that is how much they will be willing to pay.
Photo by Josh Appel on Unsplash
“You’ll find that you can justify the price you are seeking by setting it into the context of why the customer will get value from it”
So, when you invent a product, in parallel you should also invent how you’re going to talk about it. If you focus on this alongside building the product, you’ll find that the explanation becomes a part of the product. It will seep into the DNA of your product. You’ll build a product that you can explain to potential customers to get their interest. You’ll find that you can justify the price you are seeking by setting it into the context of why the customer will get value from it. You’ll build a product that you can sell. You’ll build a business.
In fact, you could even develop the “why” before you start building the “what”. I’m reminded of the work my UK team and I did at IBM in creating the concept for the server range, which would become IBM LinuxONE. We built a full customer presentation deck, we built a business case calculator, and we even built some of the announcement materials (which, to my amazement, were used at the 2015 launch event in New York). We showed much of this to a small group of close customers to get their feedback. Over months, we iterated a bunch of times to perfect the way we described it. Then we took all this to our division’s HQ to ask them to build it for us. We firmly knew that we could sell it before we asked if they would build it for us.
The way to explain the “why” is usually anchored in the way that prospects describe their problems — or “challenges”, as salespeople euphemistically call these. Salespeople are taught to reflect problems back to the customer, without judging them, by explaining how their solution addresses these challenges.
As we work with the five ambitious startups in Cohort 12 of the Pi Labs Growth Programme, I ask them these kinds of questions:
How will you explain your product to someone who is an expert in the subject? (perhaps more expert than you)…
…or to someone who is new to it?
How are you going to help them to explain it to their boss?
When they have a million other things to worry about, how will you make it a priority for them?
Why should they do this thing now?
As the business grows:
How will you introduce new features?
How do you set these into the context of what you have already delivered?
Can you make it super easy for your new sales hires to understand how to pitch it? (If you can, you’ll scale effortlessly — if you can’t, maybe you’re also going to struggle to explain it to customers).
Plot out the product roadmap together with any price changes and/or projected increased sales so you always link investment in product development to reward.
Make sure you understand the price which you can charge for your product. Link that to the value which you deliver.
Most startups begin with design, then build, then market, then price. (In fact, some start with building before they even do the design!)
Far better to start with market (the “why”), then price based on what the market will pay for the value you provide, then design, and only then build the thing you will be able to successfully take to market.
