What if I told you it wasn’t necessary to raise a large reserve of cash for developing a product? That you could build a product and have it pay for itself?
If you’re like most technology startups, you’re building a product because you’ve perceived a need and have a passion for providing a solution. You labor over business plans, fundraising, and product development. Launch time approaches and you’re exhausted. You realize you should now devote time and resources to building an audience of buyers.
Truth of the matter is, it’s easy for us to wait until we’re comfortable with a product (or service) before starting a conversation with the public.
Weak spots in this plan are that
- The product is built on a perceived need and not necessarily the actual need;
- People don’t know enough about you to buy from you;
- It requires continuous fundraising.
Now that a product is launching it’s decided money for sales and marketing needs to be raised. With this money big events are hosted and banner ads are purchased. In a way, consciously or not, we’re hoping to buy the audience. While it has worked for some, it’s expensive and doesn’t guarantee results. It means you have to have a big reserve of money. It also further dilutes your ownership because you’re going to have to raise that money from someplace.
Flip the Traditional Product Development Model
Take the above model and flip it over. Put audience development before product development. This is how Copyblogger Media launched with only $1000 seed cash. (Tweet this quote.)
Last week I met Sean Jackson, CFO of Copyblogger, for coffee. He shared that they are now anticipating to reach $10MM in revenue with 200,000 active users by the end of 2014. That’s just four years after the launch of the company.
“It’s important to know that Brian Clark [CEO of Copyblogger] didn’t have a product in mind when he started the blog in 2006. He just wanted to share ideas and build an audience,” says Sean.
Brian spent the first 18 months building a relationship with a potential group of buyers via online marketing, specifically blogging. When he did introduce a product, the audience was highly receptive to his message.
“When it comes to buying something people have to know, like, and trust you,” says Sean. “Brian built a relationship with an audience and in turn became liked and trusted because of his free advice. When he chose to introduce a product, it sold.”
That’s how Copyblogger builds its products – focusing on the needs of the audience and having empathy for them.
“Lack of empathy is a problem in this society. Yet, it’s the cornerstone of all successful marketing,” says Sean. (Tweet this quote.)
The 6 Reasons to Put Audience Development before Product Development
Sean shared with me six reasons for starting with audience development before product development. These are the benefits of having empathy for buyers and providing ways for them to voice their needs, as told by Sean. (Tweet this quote.)
- Reduce Cost. Blogging, social media, email… the cost of your time to execute online marketing is extremely low compared to the price of building a product that doesn’t sell. Allocation of resources is important for startups. It’s better to put a little time into marketing than to spend money where you may not ever see a return.
- Build Expertise. It takes time to become an expert in online marketing. Investing in marketing now rather than later is cheaper in the long run. It allows time for you to make mistakes without cost to the business.
- Know the buyer. Aligning the product’s features to the customers’ pain points is perhaps the most important component of successful product development. Surveys and general market research pales in comparison to having a dialogue with potential buyers. Many technology companies end up building products based on perceived needs rather than the actual needs of customers.
- Benefit from real-time focus groups. Using your audience as a focus or beta group from the beginning of the development process reduces the risk of having to pivot, or re-develop, your product later. It also creates a bond between the audience and your product so they’ll be even more apt to purchase from you.
- Prepare buyers for the product launch. Imagine planning a dinner party and no one shows up. Nothing is more frustrating than building a product and having no one buy once it launches. If an audience has been a part of the company since its inception, people will be ready to purchase what you’re selling once it’s available.
- Remove risk factors. If you’re taking the time to create the audience before product development, you’ll have more ammunition to talk to investors. If you can tell investors you have a certain number of followers who like and trust you, who actually engage with you and view you as an online personality, you’ve created a proof point. You can now tell investors that people are sharing your content online. Based on the dialogue, you’ve found a need for a product and you have a way to build it.
“People are not waiting for you to develop a product. This is especially true when people don’t know who you are, much less like you or trust you,” relates Sean.
This is why marketing should be a part of a company’s DNA. Not an afterthought, but the building blocks of its inception.
If you’re not a confident writer or marketer, the best thing you can do is find a writer for your online content.
“Find someone adept at getting people’s attention and articulating ideas in meaningful ways,” says Sean. “Find someone to be the brand advocate or ‘voice of the customer’ from the very beginning.”
It doesn’t have to be the CEO or some other member of your founding team. It should be anyone who can effectively communicate and start conversations online. Let them build the audience so that the customer is part of entire development process.
Do this and business will come.
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