Part 28 – 5 Ways You Are Decreasing Your Business Product Value

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When you’re a Minimally Viable Startup, and you start bringing in revenue and achieving your first successes, you don’t want to sabotage yourself.

Here are 5 practices that can easily shut down your business if you aren’t careful.
1 – Don’t Divert Resources

This one is straight forward. What you provide is selling well. It’s time to diversify, so you pull resources from your first product to develop your second.

If you’re an MVS this can destroy your business. If you aren’t making enough to be able to afford more “headcount”, you can’t afford to develop a second product or service. Your focus should be on improving your core product or service. By pulling resources, without additional workers you are essentially performing a pivot.

If something is selling well, and is successful, you don’t want to pivot away from it.

2 – Don’t Over-Market

This one is more insidious. You have a great product.  You decide to bring in more customers by increasing your marketing. So far, this isn’t a problem. But each product or service has a breakpoint.

Make sure you don’t spend so much on marketing you cut into the money you’re making from the product.  Make sure you don’t chase a failing product (or failed marketing)  by thinking increased marketing will reverse the failure.

Also, make sure your marketing doesn’t start to drive your overall product direction.

3 – Don’t Compete With Yourself

You should always compete with yourself in order to improve. However, if you create products that are similar to your original one thinking you’ll draw in more customers, you may be disappointed.

You will be shifting your customer base from one product to another. If you do this often enough times, your customers will catch on and move on.
You end up with the same customers spread thinner, or fewer overall customers at the cost of new development. Don’t create products so similar to the original that you are putting all of your eggs into a bigger basket.

You need to diversify your product portfolio as you grow.

4 – Don’t Compromise Value

This is another obvious one, but it bears repeating. It’s tempting to save money and to “cut the fat” by short-cutting a process or materials. Don’t cut so deep you cut the bone. There is a reason your product is successful. Don’t diminish your quality; that may be what your customers like. In other words, quality may be your product.

5 – Don’t Misrepresent What You Provide

Set the proper levels of expectation. Don’t promise what you don’t deliver. It’s also important to point out deficiencies or limitations to what you will deliver up front. Customers will accept less, but only if they aren’t surprised by it.
The best way to do this is in writing as part of a product description or proposal.That way both you and your customer know exactly what is provided and limitations to the delivery.

 

Don’t let the smell of earlysuccess draw you into one of these traps.

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