7 value attributes of your product

December 5, 2011 Leave a comment

Breakthrough products are driven by a complex combination of value attributes that connect with people’s lifestyles. If you are conceiving a new product, you must conduct a value opportunity analysis that evaluates the current state of products against seven major attributes of value, in the market where the new product requires significant improvement. This is an essential step in any new product development. Failure to thoroughly and thoughtfully complete this phase will have a negative impact down the line.

During the period of mass marketing, good value was based on the lowest cost-maximum features combination. The goal was to keep cost low, profits moderate, and sell in mass quantities (like Big Bazaar, K-mart etc). Value in its true sense, however, is lifestyle-driven, not cost-driven. So a product is valuable if it is useful, usable, and desirable. While cost is still an issue in the times of market segmentation, the more powerful factor is the consumer’s need to connect their product purchases with their own personal values. The higher a product’s perceived value, the more people will pay for it.

The seven attributes that adds value to any product are,

  1. Aesthetics that builds a positive association with the product.
  • Visual appeal
  • Products must be tactile
  • Elimination of all undesired sounds from the product
  • Agreeable smell
  1. Emotion that a consumer experiences with the product. There can be several emotions that a product can bring about, and they key ones are,
  • The product promotes excitement and adventure
  • Freedom from constraints
  • Feeling of safety and stability
  • Luxurious experience
  • User’s self-assurance about handling the product
  • Feeling of supremacy
  1. Ergonomics of your product that chiefly focuses on ‘ease of use’, ‘safety’, and ‘comfort’ of your target customers.
  2. Impact of your product through phases of development to end use. You should target your product for improving the social well-being of the stakeholders. Take care of negative environmental effect that your product might create, through green design that focuses on minimizing negative impacts on the environment due to manufacturing, resource use and recycling.
  3. Product Identity that also supports your brand identity. Your product should have the ability to fit among yet differentiate itself from its direct competition. Your product should also have a connection with the rest of the products produced by your start-up. Your product must be designed to fit into the context of use.
  4. Quality in the precision and accuracy of manufacturing process, material composition, and methods of attachment. Your product should be made with sufficient tolerances to meet performance expectations over time, and must hold up to the expected life of the product.
  5. Technology alone is not enough, but technology is essential. Your core technology must be appropriately advanced to provide sufficient features to your product. Remember, consumers expect technology in products to work consistently and at high level of performance over time.

Keep in mind while working on a new product that it should be aimed at fulfilling a fantasy by facilitating a more enjoyable way of doing something.

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Winning team for your startup

December 5, 2011 Leave a comment

A start-up’s success depends on its human capital. It’s not the numbers but the quality of your team that defines the growth path. The team members should be able to handle multiple functions, wear multiple hats, and deliver under pressure. Their skill-sets should compliment yours. Even if you are a one person Startup, you still need a lean management team with whom you can share some of the ‘hats’ for better performance of your Startup. It’s OK if you can’t afford a full time team.

You can avail part-time services of domain experts while focusing your energies on key business operations. The areas/domains that you need a team for are: Accounting, Manufacturing, Sales & Business Development, customer service, and may be industry experts if you are not. You need to outline descriptions based on your Startup needs on different domain/functions and search for resources accordingly. Initially you don’t need a huge team, each heading one of the functions, but an optimum mix of people who can cover all the functions within themselves as a collective team, each complimenting the other. And therefore, it requires time, efforts and careful selection to set-up such a winning team.

Outline skills and experience required for filling the team positions. By doing this exercise, you can actually further strengthen your B-plan and strategy. Also for a set of people to come together and work as a team, it’s of paramount importance that they share common visions and goals. Ineffective teams can be dangerous for the health of the startup. Asymmetrical teams often leads to start-up’s failure. Choose your team wisely.

Remember, that your team composition is the differentiator among loads of business ideas, if you are looking for investment funding. If you are Startup is at idea or planning stage, you should involve your team in strategy building exercises. Use the collective talent pool of your team to create a winning Startup!

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Competitive analysis for your startup

December 5, 2011 Leave a comment

Businesses happen in highly complex and competitive environment. It’s important to understand strengths and weaknesses your current and potential competitors.  This makes it very important for startups to understand and analyze their competitors and frame their growth strategies [both offensive and defensive] accordingly. In order to understand your competitors thoroughly, it’s impertinent that you do a systematic analysis and assessment rather than relying on informal knowledge and chunks of data that you might ‘know’.

Things that you need to know about your competitors include,

  • List of direct and potential competitors [make a list of 5 each]
  • Their strengths and weaknesses
  • What are their products/services and their USP
  • How does their product differs from your offering
  • What are their key operations strategy and how do they advertise
  • What’s the state of their business? How has been their growth in past 3 years?

In order to answer these questions, you need to develop separate competitor profile for each one of them. This kind of in-depth information will give you competitive advantage over them. You can deploy strategies through product differentiation, price discrimination, focussed advertising and sales promotions to get successful with your product offering. The competitor’s profile should include information on the,

  • Company’s background and structure
  • Financial info on their growth
  • Complete product information comprising of array of products, rate of new products development, R & D, patents and IPs, brand strength, etc.
  • Marketing strategies and their market share, alliances and geographic coverage, distribution channels, and their pricing strategies
  • Production process and operational strategies
  • Key composition in terms of human capital

You will have to get such information from both within the company and outside. Some sources for gathering information could be,

  1. Look for their website on the internet and study all the information given carefully. Also look on internet if anyone else is talking about them. Google them extensively to find info about their offerings. Check web-logs for reviews.
  2. Talk to their customers. Conduct a small survey to understand their customer satisfaction and behavior.
  3. Analyze their advertisements in different media to learn about their target audience, product features, benefits, etc.
  4. Read their promotional materials and annual reports to understand their operational strategies and growth patterns.

Doing a competitive analysis can be a challenging and interesting piece of work. You’ll learn a lot about your industry, and your insights will help you position your product better and make your Startup successful.

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5 key tips for engaging a startup mentor

December 5, 2011 Leave a comment

A business mentor has more entrepreneurial and domain expertise than you and can help in improving productivity, streamlining marketing initiatives, build better business relationships and in retaining key human capital for your Startup. Read ‘Importance of Business Mentoring’ to understand the relevance of a mentor.

Finding the ‘right’ mentor is not always easy and requires some research and hard work to get the best fit for the founders and the Startup. Here are five tips on finding and choosing a mentor for your Startup.

  1. Ask around for recommendations from your past & present colleagues, contractors, accountant, lawyer, and among your professional friends. The startups that I have mentored have all come through such recommendations.
  2. Mentors have a variety of expertise. To get the best out of them, you need to brainstorm the areas of guidance you need a mentor for. It can be from business structuring to helping with financial planning, or product strategies and marketing plans, to overall growth and development of your Startup.
  3. Once you have zeroed in on few choices, you need to thoroughly discuss the areas of engagement to gauge their views and see if they match your work principles. Before you meet a potential mentor either physically or virtually, prepare a set of questions and topics that you will discuss during the meeting. Don’t hesitate in asking for feedback on your business idea and status.
  4. An effective mentor helps you develop your own capacities and resources to undertake management challenges. It’s important that you and your mentor clearly understand the roles and therefore be vocal about what you want right from the beginning. This will ensure harmonious relationship with the mentor and you will achieve focused results.
  5. Robust relationships are built on trust and honesty. Big names may not always be the best fit for you. You do have to make a judicious decision while choosing your Startup mentor. And so finally believe in your instinctswhen you finally have to make the mentor choice.

All the best for your search!

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5 key bootstrapping strategies

December 5, 2011 Leave a comment

I have been a bootstrapper from day one since I got bitten by the entrepreneurial bug. I learnt important key lessons from my first Startup that I applied in the next to optimize the chances of its success. Based on my learning, am sharing the following strategies for bootstrapped startups,

  1. Network hard and get connected, but work the ways on your own. Look for business mentors, hire experts, and the rest ‘Do It Yourself’. Remember that all other kinds of help and support costs money that you don’t have. It’s fine that you are a rocket scientist, a specialist, but you can train yourself to do marketing, sales pitch, finance, websites, and other work that will help your Startup grow.
  2. Rent for office space is one of the biggest expenses for any Startup. Till you start making money from your business, try to work from a home office. Rent that garage the Bill Gates way. Work virtually. Spend the rock bottom minimum money to keep your Startup running. Look for innovative ways through which you can cut down your costs, be it setting up fees or the operational costs.
  3. You don’t need to start taking huge CXO salaries the moment your Startup starts making money. Take out survival money and re-invest the rest of profits back in your Startup. Before you get into the bootstrapping mode, plan your survival finances for 12 months, instead of the mythical 6 months break even period. Believe me, in most of the cases you are not going to see any real money coming to your Startup in its first year.
  4. You will have to constantly find ways to market your Startup creatively. Use social media to its fullest. Don’t go for the glittering marketing expenses, which are huge and will eat up your initial money that may not bring results to keep you and your confidence afloat for a long time. Either find interns from graduate schools around who can do marketing for you through twitter, Facebook, e-mail, LinkedIn etc. or just do it yourself.
  5. They key to any bootstrapped Startup is perseverance. If you don’t have patience and want to strike the jackpot from the word go then either you have to be the luckiest person around or you are living in a utopian world. For the real people, steady persistence with focused course of action leads to desirable results and success.

So keep a tight lid on your costs, trust your gut feeling, and march forward with all the passion in your dream. The growth may be slower with bootstrapping, but it’s all yours. All the very best in your endeavors!

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