Rowboat reposted this
Early-Stage Consumer Investing | Ex-Nykaa | Ex-Founder, Pipa.Bella (Acquired by Nykaa)
While it seems daunting, the earliest stages of a business can actually be simplified into a few basic steps. So I’m breaking down, not the 0-1 journey, but the 0-0.5 journey of a consumer business. I’m assuming here, a founder would have done some initial consumer work, identified the gaps, and is now ready to build the product and go to market. This is what I like to call the “Discovering Product Truth” phase. 1) Initial focus on product - Aim for 70-80%. Don’t aim for 100% - in fact I believe it is counterproductive to be perfect. Show the product to a few customers who you hypothesize are your target consumer. Don’t overthink, don’t hold on (despite how hard you may have worked on the prototype) and operate from the principal of “anything goes” 2) Launch on a couple of channels initially – could be marketplace, D2C, even pop-ups – the idea here is not to get revenue, but rather to get your first set of customers that will become your "wise counsel" 3) Speak to these customers regularly – build a relationship with them and incentivize them if you need them to continue using your product for feedback. 4) Now take those insights and improve your product to 90%. Check particularly for price correction and test for elasticity. Repeat steps 1-3, except scale spends a bit more for wider reach, and now also start asking your customers to review, rate, refer your product 5) Continue doing this till you’ve got momentum on reviews and ratings. Then scale up spends further and now start tracking CAC and also returns. If enough time has gone by, then also start tracking repeats. Do all this, while never stopping your conversations with consumers – ask them why they bought or didn’t buy again, how the product made them feel, what could change – stay hungry on insights always 6) Over time, if you’ve done this enough, you’ll figure out three important things: a. Your customer alpha – why are customers buying into you b. Your business alpha - what are the margin drivers c. How these two speak to each other within a marketplace And that in a nutshell, is also when I believe you’ve figured out PMF and are ready for discovering the next truth – the Brand Truth (but more on that later) Let me know what else has worked for you in your journey of building a brand in the 0-0.5 days... Fireside Ventures #seed #startup