Have you found yourself suffering from digital distraction lately? These days the wealth of online information, notifications and diversions can pose a serious threat to our focus and flow, the two vital ingredients required to get stuff done.
In the world of technology, with the plethora of choices out there to end customers, cutting through all the noise and sound bites to find something of value can be difficult.
In business, your efforts should always be focussed on how best to solve the problem faced by your end customer. A failure to place this at the heart of the development of your product or service will ultimately mean it misses the mark with your potential customers.
We learned this very early on in the BillFront journey. We knew we were entering into a competitive market landscape. If there was going to be room for us, and for us to take a strong level of market share, we knew we had to create a product that solved our clients’ problem in a better way than what was already be offered out in the market.
Our primary goal was to create a technology product that would enable digital companies to connect with an easy to use invoice financing solution which integrated into their existing systems, allowing for faster and more convenient company financing. We talked with many stakeholders in the industry about their pain points regarding financing. We also, of course, conducted detailed research ahead of launching our product into the market.
Carrying out an extensive and detailed body of pre-launch work is certainly helpful. However, nothing can really prepare you for how the market will actually respond to your product until it is launched. For us, this phase was a very informative time. Our early customer conversations gave us some crucial feedback on how we could tweak elements of the product to improve its utility and to better address the problem we were aiming to solve. Some of our projections and expectations went straight out of the window. Others were met with a stronger positivity than we could have anticipated.
When we launched, we already had a relatively lengthy pipeline of customers from across all areas of the digital spectrum. However, we quickly came to understand that the underlying business models of digital media companies are quite varied and differ from company to company. For example, assessing the financial stability of a software as a solution (SaaS) company (whose models tend to be based on an annual or monthly subscription model) versus assessing that of a more classic media network or publisher, requires two very different approaches from a risk analysis perspective.
A factor that became significant when we took our product out to the market was the size of the companies we were dealing with. We found that working with smaller companies proved to be difficult, largely because they often didn’t have the financial expertise in-house which is necessary for successful deployment of the product. They found the underwriting process was too much for them.
Whilst our focus was on providing an alternative financing solution that would be applicable to anyone within the digital media industry, in reality, we came to see that around five in every 10 customers we initiated conversations with would likely not be a viable long-term customer for us in the end.
The key learning from this experience was that we needed to be more honed and specific in our targeting of potential customers and be experts in our particular category. Six months in, we decided to stringently define the clients we actually wanted to work with to achieve a client base that could match the resources and growth plans we had in mind. Whilst, at first, that felt like diminishing our prospects, it actually led to much more realistic and sustainable growth that has benefitted us hugely. Overall, it meant:
- Only taking calls from prospects doing at least €1m in revenue - something that was straightforward to screen.
- Limiting ourselves to companies that are at least one year old.
- Focusing only on customers in the ad-tech space.
- Pivoting from assessing business models to assessing companies’ actual finances by connecting with their accounting software.
- De-scoping our geographical focus to customers in parts of Europe we know well, such as Germany and the UK initially.
Going through this process and learning these lessons has put us in a much stronger position from a sales and execution perspective.
Many technology businesses are fond of adopting the minimum viable product (MVP) approach to product engineering - building only the bare bones of what you need to get a business afloat in a way that can test for an effective product-market fit. This philosophy forces a focus on the essence of the proposition that I have come to respect and which I believe is possible to apply to business concepts in their entirety.
My advice to other businesses that may be experiencing a situation similar to us is that it’s vital to fine tune and refine your business down to its core essence to be successful. When you jettison the edge cases and custom work that eats up your time to focus on a defined product and how that product solves your customer’s ultimate problem, things will go a lot more smoothly.
One day we will open BillFront’s offering back up to a wider customer base, in other verticals and in other parts of the world. However, for now, I have learned that focus is king.
Christopher Vogt is co-founder and MD of BillFront.
A version of this article originally appeared on MyCustomer sister site BusinessZone.