Your startup is like toothpaste

Once you realize that you can maximize your potential

Photo by Erik Mclean on Unsplash

What are the three major factors that any potential buyer considers when considering a purchase?

1. Product: Does this product solve my problem? In startup parlance this is related to Jobs to be Done. It seems obvious that startups need to have a product that solves a problem, but many of them cannot define the problem quantitatively nor can they define how well they solve that problem.

Example: Craig brand toothpaste users get cavities at a 30% lower rate than users of alternative toothpaste.

2. Price: This one is pretty obvious. Your product can be amazing, but if its priced too high people still won’t buy it. Craig brand toothpaste might be really good, but if I try to charge $500 for it you most likely won’t buy it.

Many startups don’t seem to understand this aspect of supply and demand. I meet many startups who really need money but will not lower their price (valuation) in order to convert potential buyers. If you need money and your current efforts aren’t working one major lever is to lower your price.

3. Marketing/Branding: How you present your business to potential buyers (whether it be potential customers or investors) is incredibly important. This is why we spend a huge % of the time at the Accelerating Asia startup accelerator on pitching and pitchdeck design. Founders are somewhat aware of why they need to pitch, but most don’t seem to realize how important a role this factor can mean to their business.

Having a good pitch can mean the difference between raising millions of dollars and raising nothing. It can mean the difference from an equivalent startup having a valuation 50% lower or 300% higher than yours.

So, the formula is: 1+3=2

Having a great product with product market fit and having great communications means you can charge a higher price.