Stage 6: Getting your product to market and earning revenue
This is the most exciting stage, and typically the one that people think they are starting with when they build their first startup. As you now know, there is a lot of work involved in getting to this step, but you’re a pro at it by now! Let’s dive right in.
MVP (“Minimum” viable product)
One of the biggest risks in getting to market in a timely manner is how you have defined your MVP. Remember that the “M” stands for “minimum”, and remember all the work you did to determine what your users really need and want from you initially. Resist the temptation to start thinking you should “just add this one other thing”. The more you pile on, the longer it will take to get your product done and ready for sale, not to mention the extra money it will likely cost you. We call this “feature creep”, and you have to be very diligent about keeping an eye on it rearing its ugly head.
Also remember that all of those “one other things” are future potential for incremental revenue! Let your users start using what they said they wanted first, and then let them tell you what they want next. If you follow this approach, you will almost never end up with features and functions no one uses, and you will never give something away for free that could have increased your revenue on the product.
When you did your validation interviews and market research, you likely settled on a couple of options for how to price what you’re offering. Many apps and websites are SaaS (Software-as-a-Service) and offer monthly or annual pricing on a recurring basis. Some apps or products are one-time purchases for a higher fee. There are lots of options, and now is the time to look at those options and settle on a pricing structure and the price you plan to go to market with.
Remember you’re never stuck here, but it’s better to err on the side of too low. You can always offer “up-sell” opportunities later or add incremental revenue with new features. But if you can’t get the user base you need to get traction in the market, then your best efforts won’t matter.
One strategy you could use is what we call the “land grab” strategy: offer your base product or package for free, limit it to features and functions that provide value but that don’t tell the whole story, and then give people the opportunity to upgrade for the full content or value. This will greatly lower the barrier to entry for users finding you and signing up, and will give you more opportunities to find ways of converting free users into paid users.
As you’re working on your execution, you’re likely already planning on enlisting the services of a graphic designer. Remember to also get feedback and input from a user experience (UX) expert. User experience is about workflow and how elements relate to each other to create a cohesive, easy-to-use experience for the end-user. Don’t skimp here! This isn’t cheap, but if you get this wrong, it’s much harder to get users to give you a second glance later once you’ve fixed it. And it’s much cheaper and easier to plan and build to a UX designer’s specifications and recommendations in the beginning than to rebuild later.
Social media, marketing and public relations
Remember that marketing, social media, PR and advertising budgeting work you did when building your pro forma? Now’s the time to start getting the implementation plans underway on these elements. You need to build an informational site for your product or service at least 6 months prior to launch, and you should be giving people the opportunity to sign-up for email notifications there. Additionally, about 6 months prior to launch you should start publishing to social media channels and gaining followers. Build a content strategy that establishes you as an expert in the industry or field that you are targeting. You should be publishing content several times a day and having a social media expert help you will pay off in spades.
We typically recommend that our startups plan to start working on PR (public relations) and earned media about 3 months prior to launch. Earned media are stories, articles and segments on local radio, news, TV, and other channels where you aren’t paying for the coverage itself. A good PR firm in your area will know journalists and publishers and have the right relationships to get you noticed. A really good PR firm will be able to create newsworthy angles on what you’re doing to keep the interest in your upcoming launch high. This is not an inexpensive service, but you MUST get the word out and get as many followers and emails in your list as possible prior to your launch. This data is critical to helping you understand conversion rates post-launch and will help you hone your business development strategy.
We typically recommend starting to spend money on advertising the month before you launch, preferably right before you “flip the switch” to turn on your offerings. Again, advertising can be expensive, but you should plan your early spending to help you quickly understand what channels and types of campaigns produce the best returns in the form of conversions to paying customers. We ask new startups to plan on spending an average of $3,500 – $5,000 per month on advertising for the first year, and increasing that spend over time. Advertising can look like traditional radio and TV ads, Google AdWords on search terms, Facebook and LinkedIn ads, or even working with ad networks. Again, if you’re working with a reputable agency, they will be knowledgeable in helping you A-B test campaigns for effectiveness, as well as all of the aspects you need to consider when advertising to the masses (landing pages, copywriting, etc).
Product road map
Finally, although you’re being good and holding off on scope creep at this stage, you should be starting to plan your future product road map. Your road map tells you where you think the product is going to go over the next 6-18 months, and includes specific features and functions that you want to add or change over time. Being as detailed as possible when things come up will help you ensure you don’t forget anything when it’s time to actually implement your road map. You might think you’ll remember what “add tiered pricing” meant a year later, but there may be nuances that you want to preserve. So be detailed!
Getting to market and making your first dollar is very exciting! You should plan a big launch event and celebrate this huge milestone with friends, family, partners, sponsors, vendors and customers. Put money in your budget and pro forma to go all out with food, drinks, a cool venue and even some company-branded swag, like t-shirts, hats and mugs. Every dollar you spend on getting your name out there is worth its weight in gold (not to mention tax-deductible).