<div><em>Ability to quickly get a customer on board, scale at will and deliver a performant system will determine how you set yourself apart from others, writes<strong> Rahul Joshi</strong></em><br><br><br>Recently I was part of a spirited discussion with my fellow partners and advisors on positioning one of our products. Question at the table was who is your target customer for what you have built? We had launched a couple of products as part of our business software application suit. Coming from a technical background, our focus from beginning was to ensure our software covers all the business processes that an organization may come across. Over a period of time as we kept getting to know about scenarios not addressed by our software goal was to quickly turn around and account for it. In the quest of not coming across as lacking, improvements to the product preferring efficiency of speed over design were a priority. Soon it grew richer in function and feature which we could boast to show the depth in our product line. However it had a down side the way we approached it. Support and maintenance grew significantly for things that could be termed as “bolted on” to the product over the course of time.</div><div> </div><div>When few well-wishers with a business mind started asking questions as to, “Who are your primary customers”? “What core business problem you are trying to solve for them?” that forced us to re-think our strategy of being everything for everyone. Although this seems obvious in hindsight, however it wasn’t until we experienced it that it came to full realization. In fact offering everything under the sunis something startups should diligently avoid. It does not make sense from a cost perspective either where your financial resources are always constrained.</div><div> </div><div>There are several advantages to knowing the space you are going to operate in. To start with, it helps narrow down your competition. With a well-defined set you can do a better job of competitive analysis. We would often go in and pitch our entire list of features and functions. Lot of money and time was spent on it so we wanted to let the prospect know we have it. However it would discourage some prospective customers who were looking for only a subset of what we had to offer. It created a perception that since it has so many things it would be expensive than the other guy. Of course ultimately we also had to compete on the price with the other players who had limited functionality but covered the customer’s needs. The flip side was also true with large deployments. We matched the requirement but it carried the risk of coming up short in terms of showcasing it as a platform that can adapt to changing business needs.</div><div> </div><div>Knowing who you are building it for also helps set up and align your internal teams. Hiring the right technical skills, identifying appropriate technology platform, identifying early customers all can be determined accordingly. If targeting a common problem for which a solution is offered at low prices, one needs to capture a larger share of the market. It’s a volume business. Ability to quickly get a customer on board, scale at will and deliver a performant system will determine how you set yourself apart from others. On the other hand in a niche area where it is solving a critical business problem, precision and reliability may take precedence over other factors.</div><div> </div><div>It is an attractive proposition for investors as well to see a product targeted to a specific market as it helps gauge the potential and thereby their return on investment. A business in consumer retail that appeals globally has criteria on how it’s valued while a B2B business that caters to niche industry has its own way of determining what constitutes a good rate of return on investment.</div><div> </div><div>It goes a long way when you can clearly convey what it is that you do and how you can help my business. Not only does it showcase expertise in this area but also that you believe in it strongly to justify all the time and resources you have thrown at it. It gives the customer confidence that they will not be left alone when they sign up for your product.</div><div> </div><div>Figuring out your target customer is not just true with software where I first experienced it. The same principle applies to almost any other product. If you are running an e-commerce site dedicated to a specific area may it be apparel, crafts, electronics or any other, due diligence must be done on your target customer. Is it about affordable products or making a fashion statement? Is it about consumers who are early adapters of technology or is it about folks who are looking for well proven products and the experience it provides? For one of the e-commerce sites I am associated with, we are often tempted to carry products which complement our offering. They are very appealing and believe will be well liked.</div><div> </div><div>However, the test it has to pass is does it fit the overall theme and nature of the products we say we offer and our customers expect of us? Too much deviation and you may start diluting the very brand you are looking to build. There is no right or wrong option. There is a market to be served in each case, however you must choose. “Indeed we are in this market” is an excellent choice. “We chose not to be in this market segment” is wonderful as well. However “we cater to all segments” may leave you with a short runway, often knocked down by the established players in each segment.</div><div> </div><div>Where does your product stand? Now is the time to choose. </div><div> </div><div><em>The author, Rahul Joshi, is a start-up entrepreneur and founder of nectarfarm.com</em></div>
