Sven De Cleyn is an entrepreneur and business expert with many years of experience at imec. His work has covered all aspects of business operations and both practical and theoretical experience. He is a specialist in innovation management and technology transfer, and regularly coaches new entrepreneurs on building products that customers love to buy. We had him come by the Start-up Masterclass recently. If you missed it, here are the key lessons from his talk!
Getting to the Canvas
Customers inevitably want a product that solves their problems and addresses their needs. That’s why your product must have a Problem-Solution fit: it ought to solve an existing problem. “Timing is crucial to this,” Sven says. “Think of the evolution in telecoms: 20, 25 years ago, people didn’t need a touchscreen smartphone. Look what happened to Apple Newton. Bad timing.”
"Paying customers are the best proof your product is worth something”
However, talking to potential clients isn’t enough to figure out how to create this value for them. You have to know whether your potential customers are actually willing to pay for it. “Paying customers are the best proof your product is worth something”, Sven adds. “That’s why I advise all startups not to do a free proof of concept. It makes it impossible to determine whether your customers actually perceive any value in what you’re building.”
A great way to achieve a Problem-Solution fit with your product or service, is a framework called “The Value Proposition Canvas”. This process is a simple way to understand your customer needs, and lets you design products and services they reliably want to buy.
The Lean Startup Methodology
As you may know, the Canvas method grew out of the lean startup movement. In order for it to work for you, you need to live by the principles of the lean startup methodology. That means you should be aware of some of the central Do’s and Don’ts.
“Validate fast is the first one”, Sven explains. “Don’t wait until you’ve found product market fit. Always keep validating and testing. The value you can create is time-bound. So never stop validating, and apply this principle to each subfield of your startup. The second principle is that you should always be talking, talking and talking. Not just to potentials customers, but also with other potential stakeholders. I meet lots of entrepreneurs who are afraid to get out there and talk, because they worry they might reveal some of their ideas and secrets and someone else might steal their idea. But the fact of the matter is that it’s far more likely that your idea could use improvement than it’s already so good that someone else wants it. You need the feedback, and you don’t need to reveal everything.”
The third rule is something a lot of startups struggle with: Striking the right balance between listening to potential customers and sticking to your own Idea and Vision. “Everyone should be willing to adapt their product or service based on the feedback they get”, Sven says. “But you have to be stubborn to a certain extent. You can’t just change everything because one customer isn’t happy. It’s a fine line, and you’ll have to figure it out along the way.”
Don’t Forget Customer and Marketing Basics
Finding Problem-Solution Fit, even when using the Canvas, doesn’t come without its own challenges. “The most important one is understanding your potential customer”, Sven reminds us. “If you’re trying to sell a B2B solution, you’ll have to understand how that potential customer is doing his job today, and which tools will help him do that job better. But, equally important is client retention, which lots of entrepreneurs tend to forget about in the rush to grow market share. Don’t get me wrong, it’s not like you need a customer success manager right from the get-go - the churn cost will be way too high. But running a business is not just about acquiring new customers, it’s even more about keeping them.”
Last but not least: What about marketing? “Lots of startups start with this idea that they need a huge budget to do the stuff necessary to get their company out there”, Sven says. “But, in fact, you don’t need that much money to do effective things in marketing. Especially in the beginning, it’s more about fake it till you make it. Underpromise, but overdeliver.”
Written by Magali De Reu - Freelance Copywriter & Storyteller (Copymag)