Let’s step back, and see an often neglected perspective. Two questions you have to ask yourself. Both sound simple, yet largely determine the result of your activities before even beginning:
We are truly passionate about the subject so we’ve discussed it a couple of times (here and here). In order to grow beyond an outsourcing or project-based software development company, you need a product. Having a real product makes sales and marketing efforts scalable, and the company more sustainable.
Simply by asking yourself these questions, you will focus on the right problems. And the right problems at the initial stages always remain constant. Am I certain what I have in my hands has the potential to scale up(aka question 1.)? Am I aware of what target market in which I can realise that (aka question 2.)?
In our agile business development methodology, we define a product as anything that:
As you can see, a product is already something that is repeatable. This is one of the preconditions absolutely necessary to create a growth-focused sales process. With one-off transactions, you will not be able to progress systematically and scale.
Well, this one is tricky. Almost always, the answer we hear: of course, I have one product. This, from the technical point of view, is most likely true. But from the sales perspective, probably not. Here, let us refer back to the previous question. A product is something with a value proposition. Even though you might already have 10-15 clients, it is highly unlikely that all of them are solving the same problem. Therefore, you were using a different value proposition when selling to those clients - either consciously or as a natural-born adaptive seller.
Why does the value proposition matter so much? The value proposition will define the problem solved by your clients, and the problem will also define the marketing and distribution channels you can use to reach your clients. A channel will influence the approach, the sales skills needed, and so on. To illustrate the go-to-market complexity: If you see your product used in 5-6 different industries (or even company categories) for 2-3 different reasons… you may actually have 10-20 products instead of just one.
This is exactly what we are targeting with our product-market fit package. We provide you with a clear cut view on how the different value propositions, decision-makers, and target markets relate to each other. To put it short, every decision-maker/problem pairing is a different product from the sales perspective - the challenge is in systematically identifying and feeding back into the process.
Narrowing the product-market combinations becomes pertinent when you embrace the so-called bowling alley approach to bringing a new product to the market. You can read on the bowling alley method in “Inside the Tornado” by Geoffrey Moore (here is our recommended reading list). To put it short, it deconstructs the market into small niches, and instead of carpet bombing everybody who could benefit from your solution, you carefully pick one niche after the other.
Going from niche to niche has several advantages. One, which you can read on more in Clayton Christensen’s Innovator Dilemma, is that these niches are profitable to you but too small to be profitable to incumbents. Other advantages include better use of resources in marketing and sales which will yield higher results. Feedback will be faster from the target market, and this will not only foster marketing and sales efforts but also product development. By picking the most profitable niche, you can start with a segment, that actually accepts higher prices and helps you finance the farming of further niches.
If you want to learn more about the decision-maker/problem matrix we employ to prioritize the target segments, book a call with us on the following page: https://abilitymatrix.com/contact
Contact: info@abilitymatrix.com
