The past 30 days
The moment you make an assumption about a customer’s name and how to use it, that is the moment in time when you have made a fundamental mistake in customer relationship management.
It doesn’t matter what you price your service, software or product at, there will always be someone who thinks it is too much and request a discount (for whatever reasons they can think up).
You will ask your technical cofounder “why is this taking so long?”
And your technical cofounder will cross their arms and not be able to give you a reason.
And that’s okay, because by asking “why” you have started to get to the root of the problem.
Product market fit isn’t trying to guess what your end-user wants.
Product market fit is taking a look at cold, hard data and making informed decisions based on it.
Where do you get your data if you don’t have a product yet?
You aren’t negotiating if you aren’t willing to walk away.
Unless your product or service is completely fungible, and if it is, you should get out of that business right now and start a different one, avoid giving discounts for the following reason.
Never give a discount just because your competitor has a higher price than you.
Your competitors offer a completely unique service that you don’t.
And you offer a complete unique service that your competitors don’t.
Would I be willing to work for a company full-time instead of “doing my own thing?”
It depends on the offer.
And the usual offer that comes across my desk is put forward by an untried and untested co-founder for pay that is far below market rate and 1% or 2% equity before dilution.
I would be a fool to take it.
And it would not help my cofounder if I were that much of a fool.
Customers don’t care about your website, they care about their own problems.
So when I go to Yahoo Yellow Pages to look for a local Dominos pizza takeout or a Sears department store I’m expecting to find information local to me, and not only local to me, but specifically what I’m looking for.
Yahoo! Maps and Yahoo! Yellow Pages has become so “advertiser” focused that when typing in “Dominos pizza” for a very specific Zip code within the Los Angeles area I am presented with pizza “restaurants.”
Many of whom don’t actually deliver.
I called them to find out if they deliver to my area.
“No” was the resounding answer.
Not only not to my area, but for some “restaurants” not to any area.
“We are a sit down restaurant, sir. We don’t deliver. I suggest you try Dominos.”
So I explain “Yes, I did, that was my search on Yahoo! Yellow Pages, “Dominos Pizza” but apparently you consider it important enough to usurp my search by presenting your business as a viable alternative but can’t actually follow through on the promise.”
The situation has become so bad that you have to page through two or three pages of “sponsored placement” for pizza restaurants as far as 90 miles from where I live — 90 miles as the crow flies, probably quite a bit further as a delivery driver having to take streets.
Many of these restaurants have nothing to do with Dominos, the national chain.
I wonder if Dominos knows that their brand is being misappropriated.
When the required budget necessary to produce original content was high, and the cost to distribute just as high, we permitted people to curate the content for us, which slowly became permitting them to tell us what to pay attention to.
The gatekeepers gave legitimacy, because the content producer, or the participants in the content, were being vouched for by someone putting up money.
But we are/have quickly taken away that need for money across large parts of the spectrum.
I’m not advocating for no gatekeepers at all.
Book publishers, as one example, have done a fine job of keeping most of the dross out of the book stores for years, with a few misfires here and there.
They did this because their bottom line depended on quality content.
For the most part.
Or at least, content that a significant enough section of the populace wanted to buy.
But there is a subtle difference between curated content where someone lets you know “this is worth paying attention to” and a gatekeeper saying “this is the only thing you should be paying attention to because we say so.”
Entrepreneurial Traits (in no particular order):
- Thick Skin.
- Organizational Skills.
- Competetitve Spirit.
- Jump Back On The Horse-ness.
- Self Awareness.
You’re not in a hiring crisis where you cannot find the talent.
You’re just not paying enough.
There are good discounts.
And there are bad discounts.
And the difference between the two is always to do with how the customer requests the discount.
The biggest bad discount issues I see are a competitor with a higher price as a justification for demanding a discount (your competitor offers services that are unique to them as much as the services you offer are unique), and a customer that is unwilling to commit demanding a discount to get them in the door.
I have, on more than one occasion, helped a start-up hire a team of software developers to build their product.
Often, the entrepreneur is eager to hire as many hands as they can find or afford.
And I always come back to this: “Let me find out where it hurts first, before I start prescribing medicine.”
Earlier stage start-ups will always have a harder time charging an appropriate price to a potential customer than a mature enterprise ever will.
Young start-ups seem to have this enormous target painted on them that makes customers feel obliged to ask for a discount.
And it doesn’t matter what sector of what industry you are in.
“Well you’re a young video game studio and you are no doubt struggling for work, so how about you give us a discount on this project we want you to do for us.”
I judge how serious an entrepreneur is about their product development by asking “Tell me about your marketing?”
Within their answer will be revealed just how serious they are.
And if they don’t have a marketing plan that is already being executed, the product either won’t launch or it will cost a fortune to gain market share.
I bang on a lot about marketing your product before launch.
But the marketing I talk about doesn’t take the traditional shape of marketing.
Marketing your product before it is ready is marketing to your intended audience, not marketing blindly to any audience.
The marketing to your intended audience is in the shape of demonstrating your product at every step of development (getting to that elusive product-market fit moment), soliciting feedback, and letting numbers and gathered data that your audience will give you, because you are marketing to them, drive the feature development to something the audience truly needs and desires.
The very first action when you think about marketing your product should never be an attempt to spend money.