Tacks or “growth tacks”, are smaller changes, such as evolving messaging, pricing models, product features, or similar actions to accelerate growth, while a “pivot” is a more substantial change to the business, such as taking the product to a brand new audience.
When forming and launching, the entrepreneur follows an instinct or addresses some pain they’ve experienced personally. The path from building product, to refining it, to commercializing it, and creating a sustainable company is near impossible to predict precisely on day one. It’s the changes along that path that reflect the growth tacks or pivots and, when based on market feedback, they should be sought after and celebrated for bringing the business to places of increasing value.
Of course the art and science is knowing when and how to tack and pivot through growth stages. Is it a distracting signal that should be overlooked or an early warning of things to come? I believe this is so fundamentally important to creating and scaling startups that I started this new blog in attempt to better understand and share insights around such decisions.
Determining the need to tack or pivot is not the sole responsibility of the CEO, founder, or board. Everyone should be sensitive to the dynamics of product/market fit and should be thinking about how to tighten it. I think marketing people in particular can benefit from increasing their sensitivity to these conditions since they have at their disposal tools to hone in on the opportunity. All too often I see new marketing people join a company and they want to add value and immediately jump into “scale mode.” Their eagerness should be applauded, but action without understanding can be misleading and costly. An important responsibility of marketers in startups is to help determine where the venture is on the Product/Market fit spectrum and to know which marketing tactics may be appropriate.
Product/market fit is essentially a sense of how well the product satisfies a demand in the market; the measure of value that the target market perceives and welcomes. It’s pretty obvious when there is great product/market fit - the venture cannot keep up with demand. There is some great writing on the topic of product/market fit. I think much of it leans to B2C products and often speaks to the entrepreneur, but the coverage of concepts can of course be translated to B2B and applied to many business functions. In his popular blog post, Marc Andreessen does a succinct job of summarizing when product/market fit is high:
"And you can always feel product/market fit when it's happening. The customers are buying the product just as fast as you can make it -- or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You're hiring sales and customer support staff as fast as you can. Reporters are calling because they've heard about your hot new thing and they want to talk to you about it."(Andrew Chen, Steve Blank and Michael Skok have done some great writing on this topic too and it's worth getting the perspective of these entrepreneurs on reducing time to product/market fit.)
At the other end of the spectrum –or even in the middle- things can be less obvious to startup insiders and generally only become clearer months or years later when looking back. The trick is to recognize it closer to when it’s happening so you can do something about it. The incoming sales line is ringing, but not ringing off the hook. Press and analysts are taking your calls, but maybe not beating down your door. Sales are closing, but not without time, effort and time-consuming selling against competitors or “do nothing.” On the inside there is a belief that we’re still just a bit early or things will change after the next big feature.
I don’t think simply waiting for the market to catch up is ever the right answer in this case – unless you are independently wealthy and patient and really passionate about the venture and willing to risk missing some adjacent window of opportunity. If you’ve developed a truly visionary product and the market doesn’t know to value it, then consider adjusting the product, routes to market, messaging, and/or target market in order to find a fit that is commercially viable now. This is where growth tacks and pivots come into play and also where even new marketing team members can add a lot of value by helping to find better fit.
Some people will argue that no marketing should take place until the venture achieves product/market fit. I don’t agree with this. For one, I think it’s hard in practice to know when this tipping point has been reached. I think this is especially true in B2B markets, where volumes may be lower and early indicators like exponential increases in web traffic or social spreading may not be as pronounced. Because of this, I am a proponent for some marketing tactics to feel out the market and to help guide the venture along its product/market fit path.
There are countless projects that can be run to help determine and guide product/market fit and the tacks that might be needed. Here are a few quick and easy ones that I think work well for B2B ventures. (I’ll cover other tactics in a follow-up post.)
For me, I can never do enough to collect data. Based on the core product built, there may be several use-cases it can address or several user groups that may benefit from it. Run some test ads with Google AdWords and find out where pockets of prospects may be and how they perceive and talk about the areas where your product may be helpful and valued.
You don’t need to spend a ton of money to gain a ton of value with Google, but you do need to meter the program carefully because it’s so easy to blow a ton of cash quickly. Test a broad set of terms and be sure to test terms beyond your core use-cases to look for potential features just adjacent to your core product. Also important is to find some “everyday” language since prospects may have less sophisticated ways of describing the problem they are trying to solve. And with all terms, use A/B testing to hone in on your prospect’s preferred language.
As soon as I joined as CMO, we immediately broadened the search terms running and inserted some “rather basic” phrases that many in the company felt didn’t do our platform justice. Of course those several phrases didn’t do our deep functionality justice, but it turns out that that’s how many people start thinking about the problem that our platform solves. Those terms are now top performers on the site and we have literally sourced leads that closed three big new customer accounts this quarter. It also helped us to understand how prospects think about us, which we then used to tune up website content to aid in inbound marketing optimization.
Once prospects land on our website, we’re also testing a few new website “popup survey” tools. Unlike those traditional obnoxious ones, we’re having good luck with a product named Qualaroo. It’s a subtle window in the lower portion of the screen that prompts one question and then goes away. When cast against all site visitors for a month, you can learn a lot about people before they ever register for product. It’s been gold and has already helped us to overhaul a portion of our site – and led us to run three new AdWords test terms.
Don’t forget the good old fashion customer interview or survey. For customers who have already purchased from you, do whatever it takes to get in front of them –in person is ideal, but phone is better than nothing- and find out everything you can. Learn about their pains, learn about how they *first* thought about the problem that led them to you, learn about their alternatives and next-best options, learn about their perceived value and return, learn about what they wish your product could do and what things they don’t use. Then interview as many other customers you can reach and see if their points are in common. Just because they all paid for your product doesn’t necessarily mean they are in the identical market segment.
Instrument your product to collect user and usage data. If you’re leveraging a freemium model, trials, or trying for quick adoption, I believe it’s ok to ask for a minimal amount of personal information, but I would do progressive profiling and ask subsequent questions as one’s usage of your product increases. I’d also watch for popular product features or those features not used much.
With this data in hand, engage others around the business. How does it map to the experience your sales team, channel and support organization have with prospects and customers? You may want to run subsequent layers of tests or try validating with some outbound marketing programs or a customer meet-up/panel. It may be tempting to jump at the first signal, but that should be avoided. Test, tack and hone in, test, tack and hone in, repeat.
As Marc Andreessen suggests, the start-up should “focus obsessively on getting to product/market fit.” And “do whatever is required” to get there. There is a real opportunity for marketing teams to add a lot of value here and a big mistake is to send them off blindly on missions to scale before product/market fit has been achieved. And even when it has been “achieved” it is not permanent; markets evolve, competitors emerge, technology platforms change. The wise venture builds into its processes a philosophy to be constantly confirming fit and seeking ways to improve it.
What’s your experience with finding Product/Market fit and what techniques have helped you to hone in on it?