When entrepreneurs build products and services, they need to strike a balance in the level of perfection they can practically achieve and still manage to sell the product.
If you ship a product into the market that is sub-standard, people are not going to care. If you try to build the most perfect product, you will never be able to complete building it. Unfortunately, most of the entrepreneurs today live in the extremes.
It’s a good thing to create a perfect product, but if you are too much of a perfectionist, your product will never mature to a stage where it is going to be satisfactory for you.
Perfectionism has killed most startups than any other challenge in entrepreneurship. Getting it done is better than not getting it done perfectly.
So as an entrepreneur, you need to strike a balance. There always will be room for improvement in the product but you need to accept a level of perfection which you think is right for yourself, and the market.
Once you get it to some level of perfection, be ready to ship it and make revenue.
How do we find out at what point in time the product is ready to be shipped?
You have to build the product in such a way that the value in your product is much better than the value in the products of your competitors and also priced competitively. That’s why Value innovation is very important for startups.
You need value innovate and come up with an incredible value proposition. You should be able to provide a higher value than your competitors at a cheaper price.
There are 4 steps in value innovation:
- Eliminate – Eliminate some of the things that your competition is offering to its consumers.
For example, I eliminated offline classroom training for my education business which is one of the biggest factors in high cost of training.
- Reduce – Reduce some of the things that your competition is offering.
For example, I reduced the amount of direct teacher to student interaction. However it is not eliminated and teaching automation makes up for the lack of real interaction.
- Increase – Increase certain aspects of the product to make it more appealing than the competition.
For example, I increased the quality of my content and made it way better than the competition. This makes up for the eliminated and reduced features.
- Create – Create new things and have new features in the product that your competition doesn’t have.
For example, I created online forums and accountability partners which other digital marketing training institutes do not have. This added a unique value proposition to my products.
Because I eliminated and reduced things that cost a lot I have been able to reduce my prices. And since I have increased value and created new things that my competition doesn’t have, I make my product more appealing to people, apart from the reduced price.
I have launched a lot of digital marketing courses as one of the core offerings of our company. Most of the content is created by me and my co-founder Sanjay Shenoy. These courses are priced at one tenth of what people charge in the market. The training efficiency is definitely less than an offline training institute, but it is made up by the cheaper price and higher quality of the content with new offerings.
Any kind of innovation disrupts the competition. In this case, there is no innovation in the product itself, but how it is delivered and at what price point. This is called Value Innovation. Your Value proposition for the asking price needs to be unique in the market if you want to raise above your competition.
I need to do a lot of improvements on my course and the product is far from perfect. But as long as I can take it to a stage where it provides higher value than the competition at a cheaper price, people are going to buy it. I have innovated value.
If I have higher quality with higher price, then it might not be enticing enough for people to buy. If I have low quality with a low price, people will not care. If I have higher quality at a lower price, people will buy. This is the law of the market and it is as good as a law as Newton’s third law.
You just need to be more appealing than your competition. But also remember to take your eyes away from the competition and focus on your customers.
The whole value innovation cycle is based on your customer’s needs and not what the competition is doing. Value innovators can create value because of their obsession with customer success, not because of their obsession in beating their competition.
Get Market Feedback with an MVP
Your new but simple product will be an MVP (Minimum Viable Product) to test if there is some real opportunity in the market.
Instead of waiting for years to launch your ‘perfect’ product into the market and burning cash on salaries and other expenses, launch the product early so that the revenue starts coming in.
Launching your product early not only eases the cash flow but it also gives you a face off with reality.
Do people really need your product?
If your Minimum Viable Product doesn’t sell in the market even if you had higher quality at a cheaper cost than the competition, then people are not refusing to buy because of your quality level. People are refusing to buy it because they don’t need it.
If you are building something people don’t need (the no.1 cause of failure of startups) then people are not going to buy it even if your quality is insanely high. I can build the best and the highest quality bullock cart in the world and people wouldn’t buy it.
So build something based on what you think customers want, take it out into the market as early as possible, and get the validation you need to continue building your product.
Over time you can improve the quality of the product and the price of the product. You will be able to invest the time, money and energy to improve the product quality because you that people will be ready to pay. Your sales of minimum viable product is a solid evidence that the market is out there wanting what you are selling.
You need to have a ready, fire, and aim approach with your product cycles.
Though too much perfection is not good for growth, you cannot take the product to the market too early and with too little value. If you ship a mediocre product, you will still fail.
If the quality vs. price combination is less appealing than your competitor’s products then people are not going to buy. In this case, you will make very less sales and then no sales at all. But this doesn’t mean that there is no opportunity in the market.
Balance, is the key. To business, work and life.