As an innovative digital start-up, you’ve no doubt given a lot of thought to your product. This is crucial, however, equal consideration needs to be given to the other side of the equation, your prospective customers. The key challenge is to become product-market fit. You have built something that you are excited about – but will your user share this enthusiasm? At ZEAL Investments, before making an investment, we want to make sure that a number of key challenges have been nailed. Who is your target user? What does your product do for them? What unmet needs does it address? Only upon cracking this should you consider to attempt to scale.
But how to get there?
1. Launch then learn
You may be hesitant to launch a product that you don’t consider perfect yet. However, we cannot emphasize enough, it will never be perfect, and exposing it to real users and obtaining live data is the only way to progress. If something does not work, you want to understand why quickly. Otherwise, you risk losing lots of money and focusing on the wrong things.
2. Start small and get it right
A large market is compelling and promises sizeable opportunities. However, this usually means intense head-on competition with other players. It therefore pays to start your focus on a smaller niche. This way, you can perfect your offering on a group of well-defined and similar users. You can then overwhelm them with a delightful product and convert them into an army of loyal users. Chris Holbrook, the founder of our first investment, the Free Postcode Lottery (FPL), is still the face of the business and contributes a personal touch to all customer engagement. When the investment was announced, the first thing Chris did was increase the size of FPL’s top prize from £400 to £500 to say “thank you” to his army of loyal early adopters.
In parallel, you need to build your data muscle. A thorough understanding of the key levers that move your business is key to remove the fog. Be clear on what you need to measure and make sure you have the proper tracking in place. With this, you can run lots of experiments to obtain a robust understanding of your user economics. These insights are at the heart of all product improvement and marketing channel discussions – and will put you on the right path towards stickiness and organic growth.
3. Scale up
Once you are confident enough that your user economics stack up, it is time to consider paid marketing. It’s tempting to send your marketing message out into the world across a range of channels all at once. But, it also pays to start small here as well and learn as you go. If you spread your limited resources too thin, chances are you won’t get any meaningful results.
To begin with, we recommend that you focus on just one channel and get this right before trying another. Focus allows you to gain in-depth knowledge about each audience and channel. Armed with this knowledge, you can mix the right message, creative execution and tone of voice to move towards more targeted communications plans per customer group per channel.
Are you an innovative entrepreneur looking to redefine lottery and how to grow your customer base? Get in touch with Zeal Investments to find out how we can help you.