Creating Pills, not Vitamins
When we hear about technology that customers cannot bear to turn off, we get excited. Gaining an understanding of essential your product(s)/services are to your customers is ground zero for our due diligence process and causes us to ask most entrepreneurs:
“Is your product a vitamin or a pill?”
Pills are manufactured to treat or cure a specific problem, whilst vitamins are supplementary and broad, like their efficacy to treat a problem. For example, Ibuprofen reduces pain and fever within 15 mins. At the same time, Berocca boosts vitamin C which can benefit a wide range of issues from cardiovascular disease to immune system deficiencies.
In other words, pills you need to have. Vitamins you can kind of live without.
In today’s world, where the startup funding landscape is starting to toughen for early-stage businesses, demonstrating that you have a Pill could be the difference between a cheque or not.
So, what factors do we think create technological “pills” with this in mind? Here are a few suggestions:
Eliminating friction is critical for essential products. HubSpot focuses on minimising friction. Hubspot has risen to a $13.97bn market cap since its launch in 2006. Its single source of truth, intuitive UX, and unified code base allow its customers to automate processes in one place.
Lowering friction from the product UX to the entire customer experience is critical to the commercial success of a startup. Make it easy to sign up, get results and even unsubscribe from your service. If you do the first two right then the third won’t even be an option.
A pervasive user-centric mindset
A company culture that embraces your customer’s feedback and needs will always enhance a startup’s chances of success. You will have a thriving user-centric culture by developing a maniacal focus on being at one with your customers and feeding their needs into every layer of your business processes.
This requires your product managers to get out into the field regularly and engage with your customers to discover feedback around your product and what other pains they constantly experience (FYI – this may even be your product causing the frustrations). This flow of user empathy into your product design process will be a game-changer for your business.
If any of you have ever watched Gordon Ramsay’s Kitchen Nightmares, one of the first things he does is look at the menu and often cuts its size by about 90%.
In my experience, this is the same for technology products. I have witnessed over my time that great product managers focus on what features they can remove as opposed to what they can add-in. Double down on helping your users get to their objectives as expediently as possible while giving them a beautiful experience.
Rapid design iteration processes
We love founders that dare to build and ship products that barely work and then quickly iterate to build out the product.
Products that are designed to be launched with dozens of features often experience more delays than those with a more agile product set. They also are more likely to experience launch delays and extensive lists of bugs and failures. Most importantly, fully-featured product sets that have yet to secure a customer may have spent years of development building something that their target users might not want.
Our recommendation is always to let your customers get their hands on the bare minimum and then guide you on what’s next.
A balanced approach to new and core product development
Balancing new product research or future innovation with current product development is a tricky but essential balance. Google, for example, spends around 70% of its time building core products, 20% on innovation and 10% on things that may not become a reality for another five to fifteen years. Each allocation is essential to the long-term success of the business.
There is not a winning ratio; however, getting the rewards of getting balance right will ensure that your products will be best positioned to evolve as customers and markets change. Too much innovation time means that you risk ignoring the job today, while being too stuck on today may mean that users won’t find as much use in your products tomorrow.
Configurability, not customisation
We recognise that we have talked about having a customer-centric approach to product design and encouraging founders to let users shape their product road maps. However, it is important to note that building fully custom products for individual customers may not be ideal.
Customising your products to individual customer needs at a single point may jeopardise the chances of scaling your technology to a broader user base. Customised products often become stale, outdated, and expensive to upgrade over time, resulting in disgruntled customers.
The most successful B2B software companies we have seen offer configurable solutions that are easily and regularly updated. This delicate balance must be mastered to move from the Vitamin to the Pill category.
We have spoken at length about what it takes to be an AI-first business in a previous post, but we will use this opportunity to play that record again.
Whether you are a hardware business, deep tech, a consumer application or B2B software, you are all collecting valuable proprietary data. Data that can be used to feed hungry machine learning algorithms that can improve outcomes for your internal processes or become products to sell to your customers.
Pill products build their AI strategy into the base pair DNA of their products and, as a result, inject extreme levels of enterprise value into their business.
Customer connected ecosystems
We love products that encourage and provide platforms for their customers to connect and interact with their peers and partners. An open API connected to a broader industry cloud empowers them to improve their capabilities significantly.
Within the same vein, a highly connected network of business peers offers an added incentive for your customers to use your system, therefore, building a very defensive, competitive advantage.
We talk a lot about the strength of our Village and how all of its residents work together for combined success. Customer connected systems are one way for you to build your village.
Building sticky products that your customers rave about is critical in making a monolithic company of the future. The pathway there is multi-dimensional and requires customer-centricity built into the fabric of your business, but when you have it humming, there is nothing sweeter.
Best of luck.