Alex Kaminski's Blog

We (innovators, startup founders) start companies to solve a problem, to fill a need – usually this is a problem or need that we’ve personally faced in our life. We focus on industries where we have plenty of experience, where we understand the market dynamics, the players, and the consumers. So, we assemble a great team and build a great product only to find that nobody is buying your product. Why?

Here are two reasons (among many):

1. Your knowledge of the market has biased you.

Having spent so much time researching the market, formulating your strategy, researching your competitors you simply know more than your consumers. You look at your product with the knowledge you have – and as hard as you try to put yourself in the mind of a consumer, you will still be biased by your knowledge. You can’t unlearn knowledge.

As an innovator you fully trust your product, you have become biased (as has your team) in the staunch belief that your product is better, that the needs and benefits of your product offers is obvious. Yet, a consumer might have a totally different reaction to your product: your company is unknown, unestablished, the need and benefit of your product is not obvious.

You can alleviate as much of this issue as possible by focusing on customer development. Talk to customers at every step of your product development cycle. Release an MVP (minimal viable product) as early as possible – but one that fully shows the value you will bring (especially if behavioral change is high – see below). Every part of your product must show value to the customer, the design, UI, branding must be consistant and work together to show the value your product offers. Having amazing value is pointless, if because of your design the customer doesn’t see the value. This is where customer development will help you figure out if it’s your design that’s the problem or your product (or something else).

2. The behavioral change needed for your product is too large.

Innovation by definition requires a product change, with the value your innovation brings actually residing in the changes you make. The greater the behavior change the greater potential for a revolutionary product that delivers amazing value. But, consumers are wary of change, they don’t want it – that is, unless your product brings so much value that they are willing to ignore the behavioral change necessary. This balance is critical and is different for every company / industry. Generally, you want the behavioral change to be as minimal as possible, while the value your product brings to be as great as possible. This is especially true in crowded markets.

In situations where behavioral change is large your MVP must show the full value your product can bring, so as to convince your consumers to change their behavior. Therefore your MVP might need to be a little further along (in terms of functionality, speed, features and the benefits these represent) than an MVP for a product that requires no behavioral change.

So, what do you do when your product adoption is low?

1. Rethink your product to bring more value – aim for at least a 10x improvement in value over existing products. Make sure you are actually solving a problem your customers have. The only way to do so is by talking to your customers.

2. Expand your runway as much as possible. Some products need time to gain traction. This might mean raising money so you can last another 18 months, or it might mean being lean with your spending for a few months.

3. Reduce the behavioral change you require. This might be a lot easier in some products than others.

4. Target new consumers who are unaware of alternatives, making it easier to sell your product (even if you haven’t increased the value your product offers compared to competitors).

5. Get evangelists to go and market your product on your behalf.

If you still can’t get product adoption, you need to go back to #1 and again re-think your product to bring more value. As long as you keep increasing the value your product offers (and you might need to change your product to do so), you will eventually hit a point where your customers see the value you bring (the magical product-market fit), and your business will be on the path to success. The question is, how much runway do you need – and will the ROI at the end be worth it. Part of being an entrepreneur is being stubborn and believing in your product and vision, on the other hand, it’s also having the skill to determine if pivoting and re-thinking your product can still lead to success. In some cases you’ll realize that the end-ROI simply will never be worth it (at least fiscally, the experiences you’ll learn will be worth it).

Worth mentioning some points Marc Andersson made in his post on The Pmarca Guide to Startups, part 4: The only thing that matters. What happens when product adoption is low because you don’t have product market fit:

You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.

And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.