Do you have an idea that you cannot wait to launch and transform into the next great product?
Love it! - but take caution before diving in headfirst.
We have seen too many entrepreneurs with brilliant ideas launch before ironing out the wrinkles in their business plans, which ends up costing them dearly down the road.
One of our friends actually avoided this pitfall by doing something crazy—he quit Goldman Sachs to go work at Chipotle to see how the retail brick and mortar food business really worked. That experience got him into the trenches and quickly showed him that if he wanted to make a business in that industry, it would be more headache that he could handle. So he pivoted and decided to do go down another path.
There are endless ways to cut corners and negatively disrupt your business; however, not knowing your target customer early on is one of the biggest issues that we have seen derail entrepreneurs. Imagine what would have happened to our friend if he continued on with his journey without taking that job at Chipotle. Chances are, he’d be in hot water now.
Through our experiences as both founders and investors in companies like Bonobos, Birchbox, Warby Parker, and Lyft, we have realized how beneficial spending time in the trenches can be during the early days.
This beginning stage is the perfect opportunity to find your true customers and iterate your product towards something they want without all the immense pressure that comes once a company has scaled.
Search for your customer.
We have seen many entrepreneurs launch without understanding the behavior of the people who supposedly will be buying their product. In most cases, the general public is not the target demographic. It usually is a specific group, and it is your job to figure out who that is. Even if your product will eventually target everybody, you must initially gain the loyalty of a particular market to gain traction.
Is your product targeted towards Millennials? Recent mothers? Crossfit athletes? Only you can find that out.
Not sure who your target customer is? That’s okay—as long as you are working on it.
Visit the front lines to find out while your product is still young. When we started our açai-infused vodka company VEEV, we would visit bars and see who was drinking it and spend time learning about their drinking preferences. Realizing who was buying our product allowed us to tailor our marketing strategy more specifically.
Identifying your target audience is key — but it’s only the start. The next step involves iterating your product to align with your customers’ interests.
Trust their feedback.
Very few entrepreneurs truly know what their customers will want.
Steve Jobs is a clear exception to this—he is admired for designing products that customers didn’t know they would want until they saw it. While they would like to think so, most entrepreneurs, unlike Jobs, do not have this insight and have better luck predicting the weather than predicting what customers will want.
Therefore, ask your early customers what else they would like to see in your product or how it could be different. There are many ways to gain your customers’ feedback and get into the trenches—from offering rewards for completing surveys to engaging them on social media.
Ask your customers questions about everything—from the packaging, to the customer service, to the prices.
Having clarity on customer reviews in the early days is a huge advantage that many early companies fail to capitalize on. It may seem simple, but truly knowing your customer is one of the major tasks to cross off your company’s checklist before scaling.
With this said, get out in the trenches and get your hands dirty.
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