Launching a startup in today’s ever-changing environment is fraught with uncertainties. Determining the perfect product and identifying your target audience can be elusive, even with meticulous market surveys and planning.
Clayton Christensen once stated that “Over 30,000 new products are introduced each year, with 95% failing.” Many business experts advocate asking the market what it wants and then delivering it. However, this approach proved insufficient for Nokia, as Stephen Elop, the former CEO, lamented in 2016: “We didn’t do anything wrong, but somehow we lost.” Nokia believed it understood the market’s desires and provided precisely what it wanted, yet they lost their market share battle.
In contrast, Steve Jobs, the founder of Apple Inc, held a different perspective: “You can’t just ask customers what they want and then try to give that to them. By the time you’ll get it built, they’ll want something new.” This shift in consumer preferences may have contributed to Nokia’s decline.
So, how should one approach brand building?
According to Eric Ries in his book, “The Lean Startup,” the fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All startup processes should be geared to accelerate the feedback loop which consists of three stages: BUILD, MEASURE, and LEARN. You begin by BUILDing the product, launch it to the market, MEASURE the market’s response, and then LEARN from the data collected to decide your next steps.
To minimize losses during the building phase, there are two effective strategies: Minimum Viable Offer (MVO) and Shadow Testing.
MVO, as defined by Josh Kaufman in “The Personal MBA,” is a prototype developed to the point where someone is willing to make a purchase. By focusing on a few key attributes, you discover the true essence and value of the product. This approach is akin to the Minimum Viable Product (MVP), which allows you to move through the Build-Measure-Learn feedback loop with minimal effort. Consider AirBnB’s evolution, starting with matching travelers to locals for affordable stays and later introducing premium services like Airbnb Plus & Luxe.
Shadow Testing, also outlined by Josh Kaufman, involves selling a product before it exists. Tesla adopted this approach by allowing customers to pre-order their vehicles. Dropshipping is another example, where you offer products you don’t possess, purchasing them only after customers place orders.
In conclusion, you can commence your journey with lean resources and grow organically. By diligently following the Build-Measure-Learn feedback loop, you can gradually gain a foothold in the market, often starting at the lower end and progressing to become a disruptive innovation, as Clayton Christensen described it. Building a brand is an ever-evolving process that demands adaptability and a keen understanding of consumer preferences.