How a well-established company went bankrupt.

And this did not happen because of Covid-19 or the dire situation on the market, or poor sales effort.

Photo by Sven Brandsma on Unsplash

The idea for a new product the company decided to launch was cool. It was an innovative solution to the old existing technology.
Even secondary market research on this product was bright. The general market prediction was 2 billion users from 2017 to 3,8 billion in 2020.
The competition was low, with just a few significant players. None of us had the product ready to launch. There were only rumors, lots of talking about it; everyone excited waited patiently till we all launch it. The market seemed to be ready, and prospects funnel as well.

This kind of situation can happen once in a life for a sales professional, and you want to do it right, you are 100% sure you will do it right.

So we launched it, maybe too late or too early, but we did. We were one of the early birds.

And then, after four years of active product improvement and a different sales approach, we failed.

Here is a reflection of our mistakes and what I would not make this happen anymore.

I would not put on site a core product.

There was such a bubble around a new product on which the entire world was waiting that we ultimately put stable on-site income with a core product.

The entire technical team was supposed to do a fantastic job to schedule the launch that we lost big projects with the core product, we stopped innovation, and the name started to disappear from the market.

If we wouldn’t do a robust sexy new product and divided team to innovate the existing core and offer full-time support, we would secure a regular income and have a backup.

I would not change the strategy easily.

From the very beginning, we have not been solid with our strategy. The strategy of a daughter company was not the same as the strategy of the mother company. Everyone lived in their environment and point of view.

A new product was supposed to take off to the latest market segment, but it was never entirely received by the company. Changing requests for features development, a different type of target group, and the project made us work in different directions.

I would not agree with a new product without a straight and agreed strategy by an entire company. Creating a strategy during the process of product development is wrong.

I would do in-depth market research.

Many companies are shooting their decisions to the black hole.

Having proper market research with an appropriate quantitative amount of data was key to persuading management to make the right decision.

Asking our potential clients what do they think about our beta version is not market research I am talking about here.

We had no idea what was the real gap and needs to fulfill it from the new market we decided to focus on from the very beginning. We thought we do, but it was just our assumption from our micro-environment.

It is not a money waste to outsource for marketing research or directly work with 500–1000 decision-makers to get their opinion even via questionnaire.

I would keep the product’s features simple.

When two people tell you, you should include certain product features in your development; it doesn’t mean you should do it. Especially not if a person has zero-touch to market, even is responsible for his project still does not have an objective understanding of market demands.

When is a good reason to get ready for more features with the first launch?

• When you have real data from your target group.
• When you understand their needs based on quantitive market research results.
• When you have a strong technical team at the senior-level who works on time and can deliver quality.

If you launch your product and do not meet the above, you will most likely fail on the market.
Launch can happen too soon, too late, and other competition would beat you, or the product would be pointlessly robust.

I would invest in marketing.

Main competitors had great marketing, and we were a bit more humbled. Even the company belonged to the corporate; there was a low marketing budget allocated to marketize product as I would imagine.

There are two thoughts on marketing I believe in:

1. As my friend (software developer) who has been running a few companies told me: “If you invest a certain amount in development, there should be the same amount invested in marketing. I do not understand why so many companies did not get it yet.”
2. Marketing yesterday is not the same as today- it is such a changing discipline you need to reflect on. We had nice brochures, presentations; product sheets also started to maintain content on social platforms. What we missed was engaging an audience and building trust. It takes effort, but none took it as the most crucial thing to do.

I would start with a lower price and high up later.

I was always for otherwise pricing. Set up a high price and later do your discount.

Kind of old school approach…..
What about setting up a fair price, or even lower when you are in the stage of building a market?
We did it opposite. Set up a very high price and lost interest and trust.
As simple as that.

Conclusion

• Spending money on market research and marketing activities is not a waste.
• Test your ideal market before launch (use survey and send it to your ideal clients). I use https://www.surveymonkey.com/, have a call, deliver a free demo. Listen, listen, listen!
• Keep your product simple and then build its higher version.
• Do reasonable pricing does not go too high to make a 50% margin on your software.

If you would like to get even more detail on this topic or exchange information, drop me your email at this link:
https://cc.conceptswan.com/thank-you