Event Recap:
Kick-start with FOcus

Micha discusses the common pitfalls of focusing solely on product development or solving macroeconomic problems without considering the customer. He highlights how this approach can lead to failure, using examples such as Segway and Google’s missteps. By ignoring customer needs and feedback, even large companies can suffer setbacks in bringing their products to market successfully. This underscores the importance of incorporating user testing and customer feedback throughout the product development process to avoid potential failures.

Examples of “famous” product failures are presented: Google Glass, Ford Edsel, Crystal Pepsi, and an unpopular lip balm flavor, highlighting the importance of understanding market needs and customer preferences. In contrast, a successful case study of Vans footwear highlights how the company shifted its focus from selling low-cost sneakers to catering specifically to skateboarders by involving customers in product design. This shift in strategy ultimately led Vans to become a global brand known for skateboarding footwear.

The speaker emphasizes the importance of market validation and customer-centric approaches to product development to avoid failure. Different strategies for validating business ideas are presented and the importance of identifying the problem or task a potential customer wants a product to solve is emphasized.

Micha explains that in the B2C market there are emotional and social dimensions to consider beyond functional innovation. An emotional connection or social status can be a strong motivator for consumers to buy a product or service, even if it doesn’t have a functional component.

In contrast, a B2B product may not require the greatest customer experience, but instead must perform its function effectively. Therefore, understanding a B2B customer’s business model and identifying the specific problem to be sold is critical.

In general, every entrepreneur should ask the following questions when designing a B2B product

– Will my product make the customer more successful?

1. Is the problem the product is solving urgent and important to my customer?
2. Is the customer willing to pay for a solution?
3. By answering these three questions, entrepreneurs can understand better market needs and continue their validation journey.

The speakers also suggest qualitative and quantitative methods to gain insight into your product’s traction. Qualitative methods include talking to people about product ideas, participating in interest groups, conducting surveys, and getting feedback from mentors. Quantitative methods include analyzing data from surveys and data analysis of available statistical data.

Validation of the customer’s intent to purchase a product through simulated purchase validation and crowdfunding campaigns are also discussed. The intention-action gap refers to the difference between a customer’s expressed interest and their actual purchase. Simulated purchase validation involves setting up a pre-launch product landing page to engage people and track their reactions, while a crowdfunding campaign provides valuable insights into product acceptance and failure. The speaker also introduces the strategy of micro-business modeling, where instead of completing product development and then testing the market, companies identify target audiences, reformulate business models and value propositions for each group, and test them through pre-launch landing pages to determine the most promising direction. This approach requires more work and resources, but is more efficient than developing a product without focusing on specific customer segments.

Moving into the product launch phase, the focus is on product improvement based on sales feedback, understanding the right pricing strategy by assessing the value of the product to the customer, and paying attention to key performance indicators for early stage growth. Neglecting financial planning can lead to a lack of control over the company’s fundamentals, but the solution lies in working with financial experts or advisors.

In general: Emphasizing customer centricity throughout product development can lead to more accurate pricing based on customer willingness to pay, ultimately leading to a value-based approach for the company.

Micha concludes by discussing the importance of focusing on the customer for both start-up and established companies. He emphasizes that all product development should be customer-centric and highlights the benefits of this approach, such as faster failures, less money and time wasted, and increased chances of funding. Michael also encourages attendees to share their experiences and insights, noting that focusing on marketing and products was the majority choice in an earlier discussion.

OUR SPEAKER

Dr. MIcha Dallos

Micha is a finance & business model consultant at Startup CFO, financial modeling, business model development and mentoring.
He is also partner and co-founder of ADVISOS Corporate Finance, a company working in the field corporate financing and M&A.
Please see following link for further informations:
LinkedIn: https://www.linkedin.com/in/michaldallos/
Web: https://startup-cfo.services/
https://businessmodel.company/