What struck me after speaking to Paul is that the robust process he advocates is probably going to go against how we as business owners do things. You must be familiar with “Hey, I’ve got this great idea for a new thing. I think we should do it. Now!”
I think we act intuitively when we own a business and have a real passion for what we do. And yet given that the vast majority of new products and services never quite make it, clearly we need something to temper that gut instinct, and there are things we can learn about how create better products for our customers.
We’re currently developing our on-line courses and I have to say everything Paul has said backs up what we’ve been learning on the course builders program we’re on at the moment. And it SO goes against what I want to do, which is just get on with it. But I am making myself park my impatience and put the time into our planning and research!
Doing the thinking and research
- Is your new idea solving a real problem?If the problem is a really huge one, chances are that your potential customers have found their own way round it already.
- Does it do something better?
- Really understand the drivers and motivations of your potential customers. Think about the kind of fabulous products Steve Jobs came up with; no focus group or research could have told him his customers wanted these new products, but he instinctively knew what their drivers were and what they would love.
- Know who and what you’ll be competing against.This might not be obvious, and might be something that comes out of the same budget, or an alternative way of doing things.
Niching – finding your target customer
- People often talk about their target market. Paul says we should go further than that and be very specific about who our target customer is. You should be able to characterise them.
- Niching is the most successful way to approach a new service – you should know exactly who is going to buy from you and why.The more closely defined your niche is, the more chance you have of creating something that will be exactly what that group want and need.
Getting to market
- Build credibility in. When your product is ready to go, get feedback, testimonials and build up case studies from early or trial customers. This will help you to sell to the wider market.
- Do the legwork on the marketing and selling proposition – are you really clear on the compelling reason to buy?
- Get the price right. I know; easier said than done, but do all you can to test your price and make sure that people will pay it.
- What will be your customers buying decision?
- How exactly are you going to get this new product to market – what will your sales channel be?
The biggest mistakes companies make
- Saying they can “educate the market”. You can’t.
- Underestimating how long the process will take to get to market – how much time and cash it will take.
- Relying on the revenue stream of the new product too early(it always takes lots longer to build up a new income stream than your business plan would suggest)
- They don’t do the thinking part well enough at the start – and leap in and start creating.
- Creating something they are passionate about (pet projects), but doesn’t solve a real problem(or someone has beaten them to it)
- They take their eye off the ball in the main business and get into cashflow difficulties.
Paul’s top tips for getting something new to market:
- Ring-fence and protect your current business. This must continue un-interrupted whilst you play with your new toy.
- His absolute must reads for anyone creating something new are Crossing the Chasm by Geoffrey Moore (link is external) , and The New Business Road Test by John Mullins (link is external)
- Focus on the process of taking the product to market, rather than the product itself – it will keep you focussed on who is going to buy it.
- Don’t skimp on the thinking part at the beginning – it could be make or break.
I can’t resist adding in my financial pointers. When you’re at the thinking stage, make sure all the numbers stack up:
- What will it cost to develop the product (yes, and then some..)
- How much time will it take?
- What is the likely selling price, what are the costs and do the margins stack up?
- How will this new product affect the rest of your business? Will you need extra staff, premises, equipment, machinery?And if so, make sure you know how you will fund it. Using up the cashflow from your business will put your business at risk.
Now if you’ll excuse me I have some more research to do on my On-line project!
Paul Fileman is a director of Transmentum, a consultancy group that specialises in fast growing IT and technology businesses across the UK. Paul specialises in B2B marketing and strategy, particularly around getting new products and services to market.
The Transmentum website can be found here (link is external), and Paul’s email here (link sends e-mail)
I’d love to add as well, that Transmentum run a brilliant and very powerful 2 day peer group event for IT and technology companies every quarter. I was a guest speaker at their December event and I’d highly recommend it to any business in that sector wanting to fast track their growth and learn from other business owners.