Defining Value Prop and Market Fit

As indicated in our Mitigating Business Scalability Risk blog post, the words business and risk have been synonymous with each other since their inception. In this post we will continue to share ideas which will help lay the foundation to improve your early stage business operations and avoid commonly known set-backs.

It’s common knowledge that to grow a company, you need to focus on maximizing profits. There are many things that could hinder growth. These include problems in your strategy that may affect your current perception of the company’s status. These challenges can be avoided if you become more familiar with common business scaling strategies. Compada was founded because of this! It is our belief that informed business decisions are key to early business success. This post will discuss 2 additional common challenges in scaling businesses and their possible solutions.

Product market fit

When your product is in demand, it is called product-market fit. If customers are interested in the product that a business sells, then that business has achieved a product-market fit. Entrepreneurs are able to identify a market need and create a solution that customers will buy. As explained by startup coach and investor Marc Andreessen, product market fit “means being in a good market with a product that can satisfy that market.”

Although this may seem obvious, it is important to ensure that there are enough people interested in what your business has to offer and to clearly define your value proposition. The product-market fit is more important than any creative ideas or masterful teams. It’s something you must consider when building the product. To survive in business, you must have people who will buy your products.

This concept is essential to grasp before you even consider scaling or selling products. Study showed that 42 percent of startups fail due to the release of products no one wants to buy, and 80 percent of new product launches fail.

Solution

Hiring talent with strong product experience is a good idea. This specialist, along with the Product Manager, Sales Manager, and Marketing Manager, should be considered. Collaboration between these roles is crucial to ensure that the product and market needs align.

Not maintaining an open mind to a formal feedback loop is a challenge commonly experienced in early stage entrepreneurs. Instead, pushing forward on the original product idea despite timely feedback that new opportunities for the product were discovered.

Failing to identify your value proposition

Your brand voice is the way you communicate your product to the rest of the world. Your value proposition is what sets you apart from the rest. Your brand will be lost among thousands of businesses that offer the same products or services if you don’t establish your brand voice and value proposition early on. It is possible to increase your revenue by knowing your brand voice and consistently presenting it across all of your marketing channels.

A value proposition is a brief statement that explains why customers should choose your products and services. This is more than a description of your product or service. It describes the solution you offer and the promise that your customers will receive.

Solution

These are the steps to help you determine the brand voice and value proposition of your business.

• Talk to business decision-makers about the business’ mission statement. Find out how they intend to portray their business.
• Take a look at previous messages, content, or articles and note the words you came up with while reading them.
• Do your research on the customer. Take a few and look at them. You will learn about their interests, who they are and which platforms they use. This will enable you to communicate with your target audience and determine if the brand voice resonates.

Example

• Consider what your business is and is not. This will enable you to identify the essence of the voice.
• Set the tone after finalizing your brand voice. Do you want it to be professional, casual, formal, or serious? What about the medium?
• With a clear description, create a guideline for the business.

For more information on how to build a brand voice and market fit, speak with a Compada Advisor to jump start this process! Emails us at info@compada.io.