The conventional wisdom in startup and venture capital circles is that startups struggle to sell for several reasons. These include lack of market validation, poor product-market fit, inadequate marketing, insufficient customer awareness, intense competition, or failing to address a real problem. If the product doesn't solve a clear need, convincing customers to buy becomes an uphill battle.
But what happens when you genuinely believe your product addresses a significant pain point?
I. What if the Target Market is Poor?
Imagine your product solves a real problem for your target customers, yet it struggles to gain traction because the market simply lacks purchasing power. In such cases:
1. Is it truly a product-market fit issue if the need exists but the customers can’t pay?
2. Does this mean the product inherently lacks value, or is it simply misaligned with the economic realities of the target audience?
This raises a tricky question: How do you define success in markets where financial constraints are the biggest barrier, not interest or engagement?
II. How Do You Measure Marketing Effectiveness?
What if people are engaging with your content, responding to cold emails, attending demos, and even showing interest in your product, yet they still won’t pay?
1. Does this indicate a marketing failure, or does it point to a fundamental problem with pricing and affordability?
2. If a market likes the product but cannot afford it, is that a failure of the product itself or a misjudgment of the target audience?
This blurs the line between ineffective communication and external constraints. It’s not about whether the product resonates; it’s about whether the audience is capable of acting on that resonance.
III. Competing in a Young Market
Now, what if your product is priced competitively, lower than larger, established competitors, yet you’re still not gaining traction?
1. Is this a problem of brand recognition, trust, or perceived value in a young and evolving market?
2. Even with lower prices, startups often struggle to outshine competitors with larger marketing budgets, established reputations, and economies of scale.
IV. The Role of Sales Teams and Processes
Could it be that the startup lacks a strong sales team and effective processes to convert potential customers?
1. A great product can falter without the infrastructure to close deals, follow up on leads, and nurture long-term relationships with customers.
2. Is building a dedicated sales strategy just as important as building the product itself?
V. Should Startups Build Both Services and Products?
Finally, should startups consider offering both a service (e.g., consulting) and a product (e.g., a software platform) in the early stages?
1. Services can generate immediate revenue and build credibility, while the product might require longer-term investments in development and customer acquisition.
2. Is it wise to pursue a dual approach to create cash flow while proving the value of the product?
VI. Selling in Complex Markets
These questions highlight deeper challenges that many startups face, especially when tackling markets with financial or structural barriers. Success isn’t just about solving problems; it’s about aligning value with customers’ ability and willingness to pay. Sometimes, it’s not about the product itself but the systems and strategies surrounding it:
1. Are there alternative customers with higher purchasing power?
2. Could partnerships or bundling with complementary services improve conversion rates?
3. Could subscription-based pricing or freemium models lower the barrier for entry?
The path forward often involves experimenting with different combinations of product, service, and pricing while addressing gaps in sales and marketing processes. It’s a puzzle where every piece, including product quality, customer engagement, pricing strategy, and market realities, must fit together for the whole picture to work.