It’s 2013, and I’m running Product Management at Digby, a fast-growing mobile startup with a mobile marketing platform that allows you to send location-triggered notifications through your mobile app.
Retailers love it. “Wow!” they invariably say when we show them how a native app on an iOS or Android device can greet customers as they walk into store, send them a return coupon when they leave, or target anyone inside certain indoor or outdoor areas with a “blue light special.”
We’ve even signed contracts with a couple of very large retailers for very large money. Everything is awesome.
Then one day, one of our best salespeople gives me a call. “Doug, I was at the mall the other day and as I walked around I searched the Apple App Store for apps of different retailers. Do you know only about a quarter of the retailers there even had apps?”
“Yeah, that sounds right,” I reply. “But that’s just mall retailers and we still have a really big market. Let’s just focus on the part of the market where they’ve already got apps.”
The First Step is Admitting There’s a Problem
I was rationalizing. What I later came to realize is that committing to native apps was just the first step. Most retailers with apps still weren’t even using notifications with their apps, much less location-sensitive ones.
You see, everyone in your market will say “wow” when they see cool technology that could have a great impact on their businesses. But investing in it is a completely different thing, especially when innovations exist that have been around a longer time and are more widely adopted where they could choose to spend their money.
Our salespeople continued to report a lot of great first meetings, but few second meetings. We had a competitor who was making serious hay by focusing on simple blast notifications, not the cool location-sensitive ones. Despite our early success, it began to dawn on me.
We had out-innovated our market.
What’s a Product Owner to Do?
In this situation, the worst thing you can do is decide to hang around and think “the market will catch up to me.” The market moves toward innovation at a glacial pace. This is why so much of startup success is based on timing. You do not have enough time to wait, even if you think you do. Here are some real solutions you can consider:
Solution #1: Innovation Concierge
One thing you can do is essentially provide services that makes the innovation more turnkey. Don’t have a native app? We’ve got native-app-in-a-box with our tech already integrated! Don’t know how to write and execute on a marketing plan for mobile notifications? We’ll write it and we’ll even do it for you!
This can work. For us, it didn’t. There was too much work for the concierge to do for most of the market, so it was just too costly. We developed and tried to sell app-with-notifications-in-a-box, but it was too much for a retailer to chew on.
An example of where this DID work is for Bazaarvoice, the now-public-once-startup whose major success was launching product ratings and reviews for nearly every retailer who is online. A big hurdle for retailers was moderating those reviews. No retailer was equipped to filter reviews appropriately themselves, so Bazaarvoice just bundled that service with the technology. They made it turnkey, and it blew up (in a good way).
Solution #2: Expand Your Market
Early adopters make up 10% (or sometimes less) of any market. One way to keep the party going is to expand your market so that the 10% gets bigger. Ways to expand your market are diverse. You can extend out to a new persona/segment. If you are targeting the Fortune 1000, you can come out with a version of your product that is targeted at small-to-mid-sized businesses. This is an investment, but sometimes it can be a matter of packaging or small product modifications.
We thought about doing a few things in this direction, but ultimately there wasn’t any way for us to do it that was easy cost-effective. We were a bit too painted into a corner market and technology-wise.
Solution #3: De-Innovate
It’s the most painful thing that innovation-minded teams can do, but you have to build backward toward your market. If your product is the advanced course, build the introductory course and use that as a bridge to the advanced. Instead of being the core of your offering, your advanced tech becomes your differentiator.
This we did, and it worked reasonably well for us. We built backward to handle simple blast notifications, and started to add well-trodden features like ways to target segments of users. These were things that marketers at retailers were already doing with email, so this felt much more familiar and less risky. Being able to send blast messages on mobile first and then step up to location-based messages helped us unlock another part of the market.
Out-innovating your market is a common problem that kills many startups, but it doesn’t have to be deadly. The sooner you see the signs and adapt, the better.