Every company bringing a new product to market uses some form of Traditional Product Development (TPD) model which looks like this:
1. You have a concept/idea of your future product
2. The Design/Development starts
3. Then product enters into the alpha/beta test phase
4. After testing, the product goes into public (1st release)
What's wrong with it? The model is a good fit when launching a new product into an established, well-defined market where the basis of competition is understood, and its customers are known.
The irony is that few startups fit these criteria. Few even know what their market is.
Using TPD model forces sales and marketing to focus on the first customer ship date. Most of them look at this date, look at the calendar, and then work backwards figuring out how to do their job in time.
The flaw in this thinking is that first customer ship is only the date when product development thinks they are “finished” building the product.
The first customer ship date does not mean the company understands its customers or how to market or sell to them. (Read the preceding sentence again. It’s a big idea.)
In almost every startup, the sales, marketing, and business development people, and even a startup's investors are busy setting expectations to the first customer ship date.
“Why of course that’s what you do. Getting the product to market is what sales and marketing people do in startups. That’s how a startup makes money."
This is deadly advice. Ignore it.
Obviously, you want to get a product to market and sell it, but that cannot be done until you understand who you are selling your product to and why they will buy it.
The Product Development model is so focused on building and shipping the product that makes the fundamental and fatal error of ignoring the process I call "Discovery Phase."
During the Discovery Phase, the focus shifts from product to customers.
You have to answer some fundamental questions
What are the problems our product solves?
Do customers perceive these problems as important or “must-have”?
You also should define your winning aspiration, prioritize goals and have a clear understanding of what's worth doing.
Think about what happens after the launch party is over, the champagne is flat, and the balloons are deflated. Sales now must find the quantity of customers the company claimed to find as written in its business plan.
Sure, sales may have found a couple of “beta” customers, but that's not enough to keep your ship afloat.
Time after time, startups discover their early customers don’t scale into a mainstream market, the product doesn’t solve a high-value problem, or the cost of distribution is too high.
And as Marketing and Sales flail around in search of a sustainable market, the company is burning through its most precious asset— Cash.
My advice to you, don't go straight heads down. Your company needs to go through a discovery phase before it can successfully ramp up sales.
Most entrepreneurs might tell you, “I know all the answers already. Why do I need a discovery phase?”
It’s human nature that what you think you know is not always what you know.
These are not merely execution activities, they are learning and discovery activities critical to the company’s success or failure.