The Swiss-army-knife-trap and how to avoid it
Struggling to get traction as a startup? Often this is caused by ill-defined solutions.
The key challenge for early stage startups is to figure out what product to build. Especially with digital products there is a trap luring. In this article I will explain the trap and how to avoid it.
In 1886 the Swiss Army knife saw life. What is a Swiss army knife good at? It has many features, such as a knife, screwdriver, can opener, you name it. I use one while camping or on a hike. However, there are not a lot of times I can recall myself using tools on my pocket knife when at home. Most of the times I used a proper screwdriver, it’s much better at that job. Same goes for the knife, the can opener and so forth.
Along this line, one can conclude that the pocket knife is actually quite bad at a lot of things. It’s its size and portability that it's good at. You rather have 12 mediocre tools than no tools. Can you think of other products that are like pocketknives? The smartphone comes close, although one could consider it is better than some of the tools it replaces. I firmly believe Swiss army knives are rare solution types. Still, I see many startups building a Swiss-army-knife that often are doomed to fail.
Are you building a Swiss-army-knife?
Are you building a Swiss army knife? Which of these signals do you recognise?
Your target customer is everyone (or at least very broad)
People in your startup have different ideas of what the core feature(s) of your product is
Customers won't commit to buying your solution
You can't explain your product easily
Your product has many features that satisfy a different customer segment each
The solution to this issue is to improve the understanding of your customer, of your product and ultimately to redefine your product. A Swiss-army knife tries to satisfy most needs. To increase the impact you make as a startup, you sometimes need to satisfy less needs.
To define is to limit
"To define is to limit" is what Oscar Wilde once said. "Pick one thing and do it really well", is what unicorn founders highlight when Chris Hladczuk (Twitter) interviewed them. (Others vouch for focus here, here, or here, to name a few). Finding your niche, your beachhead market, is a crucial step. It is about making decisions.
Get data to make decisions
To make decisions, you need arguments. Arguments are easier made with data. If you aren't having regular conversations with your customers, start doing that (preferably face 2 face). Still, having all that data can be overwhelming. Write down what you hear. Let your co-founders write down what they hear.
I like to see data as a very broad concept, so much more than your online usage statistics. Quotes and stories by customers make up for great and meaningful data too, or for instance market data can be very interesting. I find it important that it's relatable to your customer, data that makes a compelling case for (re)defining your product. Let's visualise all those points as below. Now, how to act on this data?
Don't build every request
Not every insight you collect, such as a customer need, desire or requirement, is one for you to follow up on. You as a founder must find the best conclusion to the data and insights you find. If you follow up on every request, you get a Swiss army knife that is under par for everyone.
The trick is to make the most lucrative cross-section of all your insights. It requires creativity, a sense of opportunity, critical thinking and debate to figure out what that conclusion is. Multiple answers could be right, that is to discover later by following up on them. But sticking to one answer is advised. Remember: To define is to limit. It's a temporary focus. Maybe you start out with making an awesome knife, before moving on to awesome nailclippers or vice versa. Which segment is the most interesting for you? You better get 10 die-hard fans than 100 people shrugging.
Digital products have higher Swiss-army-knife risk
Digital products allow for easy creation of Swiss-army knives. Nobody mounts a toaster oven on a lawnmower (I checked, this is my proudest Google search of the year). However, in digital environments, the options are endless as there are no physical limitations. One can create a SAAS-solution that optimises your IoT-curtains while trading bitcoins. But you probably don’t want to do keep combining everything you can think of (I'm looking at you, any ICT project of the Dutch government ever). Sometimes limiting your solution will result in you needing to throw away written code or disappoint customers that do use some of these features. Those are hard calls but could be beneficial on the long run.
Furthermore, when the Swiss-army knife was released, knives (iron age, years BC), screwdrivers (15th century) and can-openers (1858) have been around for at least a couple of decades. Integrating solutions into one requires deep understanding that comes with technological maturity. If you introduce something very new, keep it simple. Not only for your customer's sake but also for yourself.
Do you agree with my thesis? Should you at all cost avoid Swiss-army-knives? Let me know in the comments!
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