Your start up's success depends completely on this Factor!

Lemme start with the Question - What are the different factors which decide the fate of any startup. There are broadly four factors viz. Market, Team, Strategy, and Execution and in terms of their importance Market >> Team > Strategy > Execution.

Let’s try to understand this with an example: Business A is about selling Immunity Boosters. We assembled the best team with the best researchers and business minds and had an awesome product, Go to Market and Communication strategy. The execution was also perfect.

What do you think would be the growth number Pre and Post Covid. There would be a huge difference which would be completely attributable to the changed market conditions. This is the POWER of market. Even with a lesser team/strategy and execution, a company would see far superior results in the Post COVID world.

So, the single most important factor to consider before you launch your startup is to assess the market. The demand for the PRODUCT/SERVICE has to be already there and what you are doing to just catering to that demand rather than creating the demand.

Imagine explaining the importance of immunity in Pre-COVID vs Post-COVID world to a potential customer. In Post-COVID world, there is an ingrained fear in people which makes them receptive to Immunity Booster related communication and in fact, a significant percentage of them are already looking out to buy Immunity Boosters so you are just satisfying a strong demand.

Framework to assess market

Now let’s create a framework to assess the market so that we can apply these rules in practical conditions. Generally, any product/service can be either a painkiller or a vitamin. Painkiller is a product which is actively sought after by a potential customer (as he is in pain) and he would need no convincing for buying that.

Vitamins, on the other hand, need a lot of pushing as it is not a must have and customer does not identify the need for the same. It needs a lot of convincing from strong influencers like doctors for a user to buy a vitamin. Similarly. if you are in a “good to have” market segment then be ready for a lot of delays on the customer end.

Its always better to target a market where your product would be a painkiller and the customer is already primed to buy the same as compared to a Vitamin product market.

Tangible benefits of a Painkiller Product

1. Strong conversion metrics - This factor plays slightly differently in B2B and B2C products. For B2B products, this means much shorter selling cycle. If you have identified the problem as well as the person who faces that problem on a daily basis (within the organization) then he would bat for your products within his company. An insider (whose life would be better after purchasing your product) can any day sell your product much better than a sales person.

For B2C - this leads to higher activations, retention as well as referral growth (within the target segment whose pain is being solved) since the incoming user would already identify with the problem and is more susceptible to sharing the product with his friends.

2. Lower marketing expense - Product claiming to solve a pain point is definitely going to see much higher CTRs (Click through rates) as compared to a product which is a vitamin. Higher CTRs lead to lower CPC (Cost per click) and additionally, the conversions would be higher because - Yes its a painkiller.

In spite of these apparent benefits of a pain killer segment, a lot of good teams devote very little time to assessing the market and end up burning out on a Vitamin product. Its alright to be working on Vitamin segments but we should be cognizant of that fact and the business model and team team needs to take the same into account.

An Example

I will give you one example that I recently came across which exhibits the power of a painkiller product.

Peppa Pig is one of the most beloved Cartoon of recent times and is really famous but since it is created by a British team; it is available only in English. However, there is a huge demand for Peppa Pig in Hindi which was not being catered to. Same is the case with a number of other cartoons and Hindi kids content in general (except for Hindi poems which is a highly penetrated genre).

This Channel - Genevieve’s Playhouse - lapped up all this demand by creating awesome Hindi content using Soft Toys and have raked in 3.5 Bn views. Genevieve has 63 videos translating to ~54 Mn views per video which no marketing can gerner in spite of the highest marketing budgets.

Hope you liked the content - If yes, pls tell me in the comments. Also, dont forget to share more such Painkiller and Vitamin product examples.

And of course, share it with friends who seem to be working on Vitamins/Painkillers. Ciao till next week.