There’s a temptation for software startups to build features around the users who will buy your platform, causing your business to lose focus.
Eric Prugh, Co-founder and Chief Product Officer for PactSafe, says, “We have a very broad platform that can serve any size company that does anything. The biggest challenge as we’ve created a new niche product has been the temptation to fall into the trap of ‘me too’ with competitive features. This created challenges — prospects who we talk to expect our product to be similar in features, functionality, and design to the competitors they know.”
“Over the years, it’s taken everything we have to not just lean into that,” says Prugh, “And we have still fallen victim to it at many points in time. Lack of focus would have killed us, and that started to show its face as we built more and more features that our competition had.”
Putting a Software Startup Back in Focus
He says lack of focus can mean you essentially have two product roadmaps, one for your new market and one for the market you’re competing in. “It creates a ton of confusion, painful efforts in educating sales and marketing teams, and a messaging and positioning nightmare,” Prugh says. “We found we needed to hone in on the ideal customer for us and the use cases that they needed to solve.” He says their ideal customer:
- Has resources assigned to help with implementation
- Has buy-in from both the business and the technical teams
- Integrates their product’s API from the get-go
- Doesn’t use excessive ongoing resources once they go live
- Doesn’t have a large number of users on the platform but, instead, relies on the integration
“It is helping us sift through the mud and prioritize the things that are going to move the business forward and separate us from the competition,” he says.
PactSafe, however, faced an unanticipated challenge. “At first, we knew we created something completely new and different, and that is a huge advantage,” says Prugh, “But in order to make something completely new work, we really needed to build on top of something that people were familiar with. So we’re in the process of creating a seamless user experience that merges concepts and introduces a new idea in the format of something familiar.”
“So, we had to pick and prioritize the right features to develop that our competitors had, build our way of thinking into those features, and then introduce the new concept (clickwrap agreements instead of esignature) as a gradual process,” he explains. “We’re trying to educate while also keeping the lights on.”
Processes that Maintain Focus
Prugh says business alignment in these areas keeps his team focused:
- Founders agree on the top two or three product objectives for the year and meet on them regularly.
- The roadmap ensures that every feature PactSafe builds aligns to those objectives.
- His team completed an exhaustive customer segmentation exercise to ensure their objectives align with the value they deliver to each segment.
- They’ve built the “me too”/competitive features to the point where they compete well, and are now focusing their roadmap on differentiating their product.
Prugh says the steps PactSafe has taken are paying off. “The level of alignment, the vocabulary, and the messaging are completely aligned across the business in a way I didn’t think was possible 12 months ago,” he says. “We know our customer and their objectives, and now I can share our roadmap and how it aligns to those objectives. We have a lot of work to do to deliver on this, but it’s been transformational for us and given us focus.”
He adds that his team has recently categorized their customer base as “ideal” and “non-ideal” based on factors including how much they spend, use case, and how willing they are to lean into their differentiated product offering. “It was really interesting,” Prugh comments. “We found 40 percent of our customer base was non-ideal but only made up 10 percent of our revenue.
“Since we went through customer segmentation and roadmap alignment, we’ve only increased our non-ideal base by 1 percent,” he says.
Advice for New Software Startups
Prugh explains, “In the beginning, you can’t segment customers or focus because you’re never going to know what the best, most ideal use of your product is. Or, you may struggle to get traction even if you know your ideal customer because it’s too new of a product to take to market. I always suggest that you get out there and sell your vision and your product as you think it should be, even if it’s not fully built yet. Get feedback, understand your customer’s objectives, and figure out how your vision aligns with that.”
“When you’re tempted to simply build what your competitors are doing, try to identify and prioritize the right features that will give you long-term benefits,” Prugh concludes.