Don’t read this if you know everything and are 100% sure the whole world is waiting for your great idea. However, if you have the tenacity to learn, read on. Especially if you are about to develop an innovative product from your concocted, ingenious idea and think of building your own startup.
The moment you get an idea for a great product, your upstream marketing should kick in. Correct. Marketing is not just advertising, making a fancy website or flashy brochure. Marketing is you’re here-and-now and the key to your future. If you plan to have a future, and not just want to make a quick sale of your nifty idea to an imagined big buyer with a fat wallet, read on.
What is upstream marketing, and why bother with marketing so soon?
If you pose yourself this question, it shows you are curious and want to learn. That means you are on the right track. You’d be surprised how many I-know-it-alls maintain they really do know it all and are on that seductive road to riches with an arrogant show-me-the-money attitude. Too many with (possibly) great ideas that are haughtily, yet so ignorantly jumping on that sinking ship to failure. I vividly remember a CEO/CTO/CSO (yes, he was inventor, founder, and sole Chief), who failed with 3 startups, but maintained: “I don’t need marketing, I need sales”. He never had any sales.
Brainstorming and coming up with ideas do not drive innovation. Ideas don’t lead to innovation success. The success of an innovative product is determined by your users, your clients. If they are ready for change, they are driven by their needs and wants, as well as by their wallets. If you can develop a solution to a problem that delivers more benefits than existing alternatives, then you are on the road to success. Innovation comes from connecting with customers in meaningful ways, and this requires that you develop a unique, valuable customer insight before you should even begin generating ideas and developing that innovative product. Some people are scared of innovation, of the new, the untested. So be prepared for the old adage: “Why change? I have always done it this way”.
First of all consider this. It is very likely that one or more people somewhere in the world, or just around the corner, came up with the same idea like you. So speed is of essence. A worse scenario is that somebody was faster than you, and already has made a product out of the same idea you thought you so uniquely came up with. Imagine that product is already selling like crazy, without you being aware. That would hurt, right?
Upstream Marketing starts with Market & Needs Research. This doesn’t mean staying where you are and Google around the Internet. You can try, but chances are pretty big you miss the important going-ons. Another option is buying one of those voluminous, pricy market research reports, for which offers probably fill your spam mailbox to capacity. May be useful for multinational corporations with immense revenues, but not recommended for startups, unless you insist to compete head-on with a Fortune 500 company. Research demands that you get away from your desk, out of your comfort zone. Go outside, and physically visit your market. I don’t mean the fruits and vegetables market, but the market where (you think) your kind of product will be (or is already) used. Yes, this is where the word “Marketing” comes from “The Market”. And you will have to live with Marketing from start till sales, and beyond.
Your Market Research should answer the who, what and where the future users of your innovative product are. Figure out who else is selling the same (kind of) product, for how much, for how long, and how successfully. Even if there is no competing product, there is always something (a procedure, a method) that does what needs to be done. Unless you have something truly unique. Even then you still have to figure out what is happening in your market right now, especially if your innovation is genuinely a first of a kind. And whilst you are roaming the markets, snoop around if there is something new about to appear on the market that could compete with your product, or craftier even, that could be something you should incorporate in your own product too.
The second research part is Needs Research. Because you will be selling benefits for the user (I assume you are aware that you don’t sell features, the big mistake of product developers), find out if your planned product will have one or more benefits. These are not just economical benefits, but can also be environmental, functional or social benefits. Is your product a nice-to-have or a must-have? Needs Research means talking with prospects, asking questions, listening, observing how they use or do what they are doing now, and what they think about it. Problems not only regard the use of a product, but also affordability, efficacy, ease of use, reliability, availability, serviceability, maintenance, and so much more. Rule of thumb: if your benefit solves a certain problem or pain the user has now, doing or using what they have today, you are on the right track. Then pose the big “What if” question. Ask these people willing to talk with you: “What if I can deliver a product that solves (this or that) problem, would you use it?” This information is crucial for you to make a product that fulfills the user’s needs and wants. This is what is called “Branding”, promising an improvement or solution, and eventually keeping your promise. No, branding is not a logo, corporate colors or a brand name: those determine your brand, the way to identify your company or product. Branding means delivering on your promise.
Meeting future users offer you other opportunities: establishing long-term relationships, in other words, creating your first loyal customers for years to come. Down the road when you are selling you should know that obtaining a new customer is about 5x costlier than maintaining an existing, loyal customer. You can even go a step further beyond using them as a sounding board. You can select your “favorites” as advisor for the further development of your product, or trialist of your first functioning prototype. Eventually, appoint one as member on your Board of Directors or Board of Advisors. Loyal customers are your best and least expensive marketing tool for the future.
Whilst you are getting a better understanding of the feasibility of your product, you should also perform a patent search, making sure that your idea will not infringe on existing patents, as well as investigating whether your product, with certain modifications, could pass this possible infringement test. Moreover, this is the time to consider whether it is worthwhile to patent your idea or product at all, or keep it under guard as a trade secret.
Another important issue that must be investigated now is whether your product will pass the litmus test of regulatory regulations and requirements. This is more applicable for products used in the medical field, food & beverages, and any other products where safety and security are of concern. Better find out early than finding out too late after having spent lots of time and money on an idea or building a product that will never receive approval, or that would take years and years to receive approval, which is mainly the case for medical products.
With the obtained knowledge and insights, you have to decide how to position your product and develop your strategic plan, outlining to which types of users and in which markets and countries you will market, how you plan to overcome customer reluctance and objections, how to counter current and would-be competition.
This is the time and moment to tackle the financials.
How much will it cost, in terms of money, manpower, materials and time:
How much money do you need now, and the next rounds?
When will you break even?
What is the ROI (Return on Investment) for the shareholders/investors?
Other important issues to evaluate at this stage are the profitability, sustainability and scalability of your product. These are important matters that have to be affirmative, otherwise don’t bother to continue building a product that is bound to fail, or go back to the drawing board and reassess your whole plan.
Yes, this may sound like lots of work and lots of expenses, but rest assured, if you don’t go through all these steps, don’t expect potential investors, partners or collaborators to place trust in you. Nobody is interested in spending time and money on a project that does not resonate with future buyers and users, does not differentiate from what is on the market already, and cannot be substantiated with solid evidence of the benefits it offers. Right: this is the description of a Value Proposition, which can be written only after having gone through all of the above. Read more here: http://bit.ly/1NceRlg
Did you realize that at this stage, and after so much work, you still have not built your final product? You’ll be amazed how many startups try to push sales without knowing barely anything of their target markets and possible users, and then feign surprise that they are going belly up. Marketing requires time, efforts, expertise and money. If you cannot do these research and intelligence steps yourself, you need outside assistance from people that do have the experience and expertise. Ask me.