Bringing a New Product to Market
5 February, 2021
I joined a startup to help launch a new business and bring a new product to market. The “big” startup was a hot technology company and on a path to IPO. They had a strong offering in the market and were looking to create a second product. I was hired for that purpose. The new product would be born out of the first. We were getting a good signal from prospective customers that they wanted us to create a new stand alone product based on capabilities in the first. The company had done amazingly well in the market with the first product. Their goto market strategy was to get developers within an organization to play with their freemium product and then over time it would grow into a paid purchase. Our particular new product was very different though we had assumed we would gain similar traction with a similar strategy.
Initially we tried to use a similar strategy to bring our new product to market, but that did not work. It became clear that the market demands were different and we ended up pivoting to target enterprises from the get-go. We invested a lot of time to talk to and iterate with our prospective customers and understand their needs. We learned that addressing this market required a very different strategy and we had underestimated the work that would be needed. We had allowed ourselves to be lulled by our reputation and thought that based on the company’s prior success, that we would be able to land the business. Everyone would love our product too right? We made a lot of assumptions that ultimately hurt us.
For example, we thought that the company’s brand would help us, and the rest of our senior leadership supported this idea. It actually ended up hurting us. The reason is because our products were very different. The existing product was in a completely different domain, which ended up causing a lot of confusion. Customers were perplexed if our product was related to a similar domain. We found on calls that we had to repeatedly explain that although we were part of the same company, our product targeted a different domain.
Another challenge we ran into was underestimating the effort it would take to create a new market. Our product was breaking new ground providing a new way to solve an old problem. Creating a new market can take a long time and require a lot of investment in education. We thought based on signing our first few 5 figure deals that the market was there. We learned over time that this was a false sense of reality. We had landed the early adopters and there was a lot more work necessary to create the market demand. We needed to educate the market, which would take time and money.
Ultimately we ended up shutting down the business. Although it was bringing in revenue, the path to its success and the required investment was much greater than our company was prepared to give.
The overall lesson here is that we did not do enough diligence early on. We did not question enough of our assumptions. We should have consulted with founders and advisors who had tread this path so that we would have reasonable expectations. They could have helped us see much earlier the challenges that were ahead and how to navigate them.
- Be very careful about taking your assumptions for granted. We tried to apply the playbook for a different kind of product and different kind of market. When bringing a new product to market, you have to understand the needs of that market and its customers.
- Pick your advisors wisely. We needed to have advisors outside the company and outside our echo chamber. What I learned much later, talking to external consultants, was that our strategy was not suitable from the start. If I had talked to them earlier, that could have helped us formulate our strategy more realistically and come up with more reasonable expectations.
- We were caught up in the excitement, and that blurred some of our vision. While enthusiasm and believing in your product and brand is always great to have, don’t let it cloud your judgment. Trusted advisors can often help clear the haze.
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