How can you determine whether there’s actually a need for your product or service?
How do you know if customers will pay for what your product or service solves?
Those are the questions business founders run into when starting up and expanding internationally, especially in markets like India, where competition is fierce and customers have access to plenty of products and services that accomplish the same tasks as yours. When expanding to India from Canada, here are some steps you can take to achieve product-market fit and ensure success in your new market of choice.
Defining Your Value Proposition
Before we dive into product-market fit, let’s first discuss the value proposition and how it affects your business. First, let’s talk about what a value proposition is.
A value proposition is exactly what it sounds like – it’s a strategy for delivering values that customers care about to solve problems they have. It all comes down to your business offering some sort of advantage in some area of importance to your customer base.
Measuring Product-Market Fit
Entrepreneurs need to look at two important metrics to determine if they have a market fit. These are customer acquisition cost (CAC) and lifetime value (LTV). CAC measures how much it costs a company to acquire a single customer. LTV is more complicated; it calculates how much money each customer will bring in over their lifetime as a result of their purchase or continued subscription with that company. If these numbers are high enough, then there’s product-market fit. If not, then you may want to go back to the drawing board.
Uncovering Customer’s Underserved Needs
While startups generally aim to provide a solution that adds value for everyone in their target market, it’s equally important to identify who isn’t being served by existing products. A comprehensive analysis of your industry and competition will give you insight into both your customer’s pain points and why they aren’t being served well enough by their existing options. With so many businesses trying to make sales in India, it’s imperative to find an area where you can set yourself apart from competitors and start turning a profit.
Understanding the Market
Indian consumers are on a fast track to digitally-driven lifestyles. As India adopts newer technologies at an exponential rate, both B2B and digital companies in all sectors of industry would benefit from creating tailored products that help their clients thrive in these digital times. One of those products may be what you have built. Does your product have customer value? Does it solve problems? Will customers buy it? Only you can answer these questions by really understanding your market and its needs. This is where product-market fit comes into play.
Understanding Your Customers
Canadian startups need to understand exactly who their target customer is. In order to do so, they need to study market trends, competitors, and more in order to have an idea of where there is demand for products similar to theirs. If you’re selling software as a service (SaaS), it will be important to understand your target customer – both from a demographic standpoint as well as a behavioral one. Understanding what kind of person would buy your product can help you determine pricing and whether or not you should offer free trials or other incentives to get customers to use your product or service.
Define Your Target Audience
Identifying your target audience is essential in finding product-market fit. But how do you figure out who your ideal customer is? The best approach is to start by identifying a single market for now and focusing on that. That’s what many startups do—they find their niche before trying to sell to everyone. One of the most important decisions you’ll make as a startup founder is choosing what problem to solve and who you will solve it for. So, narrow your focus from day one.
Targeted Marketing Campaigns
It’s important to market your products directly to your audience. If you sell a SAAS product, use social media and email marketing software to follow up with prospects that have shown interest in your product. If you sell digital products, it’s equally important to send automated messages about new updates and products through email lists and social media posts—because even if they don’t click on links or open emails, people still see these updates from their newsfeeds.
Key Takeaway
When an entrepreneur is seeking product-market fit, it’s imperative to dig deep into market needs and customer feedback. A common theme emerging across conversations with entrepreneurs is that B2B companies are having a tougher time finding product-market fit because their customers (in India) often have very specific demands. This can also be true for digital products and services. For example, if you’re building a SaaS platform that aims to help small businesses manage inventory more effectively, your target market may want more than just inventory management—they may also want accounting and HR software on your platform as well. It’s not enough to simply offer them what they need; you must understand what they want and how you can deliver it in order to find product-market fit in India.
What do you find to be most challenging about finding a product-market fit for your startup?
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Melissa How
1 July 2022 at 6:27 amThis post is very easy to read and understand without leaving any details out. Great work! Thanks for sharing this valuable and very helpful article about digital startups.