Pravin recently tweeted asking how start-ups should spend the first 100k of angel money. Since we’ve been doing just that at Unbxd, I’ve developed a point of view based on our experience. Please keep in mind that the points below are based largely around a:
- B2B product start-up;
- Serving e-commerce companies.
- Product Vision
- Sales
- Market
- Team
- Who will it be targeted at, you should have at least figured out who in a business organization the product is aimed for, i.e. who will be using it? Someone in the engineering team? Or the sales and business development? the engineering management? marketing department or the leadership in the form of the CXOs?
- Usability, how accessible will the product be for them, what kind of use cases would you like to handle.
- Push you and the engineering team to solve pain points that exist beyond what you have or had imagined. The trick is in separating signals from noisy inputs. Not every pain point might be within the ambit of your product vision and not every signal may be possible with the given resources you possess.
- Validate your assumptions about the product. Yes, you have to separate signal from noise, but you also need to ensure that you’re also validating existing functionality. Just because you have a product vision is no guarantee that someone will pay for it.
- Are a beacon for other prospects. These are generally larger customers who push the product from being a rudimentary prototype that you built for validation, towards being a whole product. Solving their pain points qualifies your product to solve pain points for customers in the same market segment. The prospects in the same segment look to these reference customers for industry leadership and minimizing their own risk.
- Help you find out how much people will be willing to pay for your product.
- Who your target customers are. For instance, not every prospect may be able to pay for your product. You’ll have to identity which ones to go after based on their ability to pay.
- Who your competitors are. Not every product similar to yours in technical specs may be your competitor. You’ll have to identify competitors based on target market, pricing and support models.
- How much will a prospect be willing to pay. Every segment’s capacity to pay is different. You may choose to go after one segment or multiple segments depending on how much they’re willing to pay and the expected returns.
- How to position your product. Different types of messages echo differently to different segments. A business-person might look at the ROI, an engineering manager might look at the cost, an engineer might look at product performance. You’ll have to determine the characteristics of different personas: user, buyer, influencer and appeal to each one differently to attract them to your product.