STEP #3: It’s always more than the product

(expanded from “5 STEPS TO GROW AN INSURGENT BUSINESS“)

---

In STEP #1, we defined the core product innovation, and in STEP #2, we discussed how to make the offer visible to prospective customers in a busy, noisy marketplace. 

As we enter STEP #3, we assume that we have generated some initial interest and we want to convert this into some solid opportunities. But what does this really mean?

The Customer Journey on a Personal Level

Someone, somewhere, in company that you would like to do business with, has spotted something about your offer that has caused them to pause (perhaps only briefly) and take note. You have secured that very first spark of interest, what happens next?

Maybe they will do a little research themselves, or maybe they will share their interest with a colleague. Before they shout too loudly, they will want to reassure themselves that your offer, and indeed your company, are genuine, otherwise they risk looking stupid. 

If they are convinced and word starts to spread across the customer organisation, eventually it will reach some people that are really able to make use of your product. At the very least, this team will want to dig into more detail and validate your offer in the context of the challenges they are facing. It could be that they welcome your solution with open arms, but it could also be that they have a negative reaction, perhaps confident that they will solve their problem based on their existing approach, perhaps even a little embarrassed that they were not already aware of your product – converting opportunities is as much about psychology as it is about technology!

And finally, when they decide that they could perhaps integrate your product into their product, they will need to be able to rely upon the accuracy and capability of your documentation, design-in tools and technical support team. They will also need ammunition to convince other stakeholders across their organisation that you are a risk worth taking.

As an incumbent, desperate to secure your first wins, how ready are you to facilitate such customer journeys? To knock down barriers and reduce friction at every stage? STEP #3 is all about answering these questions.

The Need for Proof Points

Let’s start with one of our home truths for insurgent businesses; “Skepticism is inescapable!”. Just because you say it, doesn’t mean that your prospective customers believe it. You have to say it, mean it and prove it, again & again. This is particularly challenging for incumbents where there is a limited track record to draw upon. Every time you come across a new contact in the customer organisation, you will need to overcome this skepticism, building enough confidence to give you, the newcomer, a chance. 

Underpinning the Product Proposition

Having sparked some interest with your headline innovation, a potential customer will be looking for some proof that your proposition holds water, that you can really deliver on your promise. Such underpinning can take many forms; from static whitepapers and Q&A pieces, to how-to videos, savings calculators, try-before-you-buy offers and “freemium” models (where a subset of capabilities are made available free of charge, with the option to upgrade to paid for services as the users’ requirements expand). 

Whatever you choose:

• Stay on message, ensure your material fundamentally promotes your unique differentiators (see “Positioning Statements” in STEP #2)
• Don’t spread your resources too thinly, better to have one really compelling demonstration than several that only loosely capture your advantages.
• Don’t ask users to enter details prior to access. You risk losing most leads this early in the sales process.
• Make the results easy to share across the customer organisation (see “Feeding Champions” below).

Building Credibility with PR

Public Relations (PR) is important to build awareness (see STEP #2), but it is also useful to build credibility in your product proposition and your overall business. 

• Find ways to turn internal events into newsworthy stories and publish across trade & social media. Examples include:
  • Major development milestones
  • New hires
  • Successful funding rounds
  • Partnership agreements
  • Conference & exhibition participation
  • … 
• Comment on relevant industry developments, bringing your perspective to the discussion.
• Most importantly, try to gain approval to publish early customer trials & testimonials. Releasing these first engagements into the public domain is incredibly helpful in building confidence amongst prospective customers; no one likes to think they are going it alone with a new entrant. Such public endorsements are so valuable, I recommend discussing early in customer negotiations. You should be willing to trade some elements with your first customers to win agreement to make public statements of support.
• Don’t forget to update your own website; if your “News” section hasn’t seen any action for more than a few months, it is an immediate red flag to anyone doing some basic research on a new vendor!
• Be careful with “Thought Leadership” pieces. They can be very helpful if they are “on message” but, in my experience, they can easily become too generic. Imagine you are speaking one-to-one with the representative of the target customer, and be clear on what you want the key take-aways to be. It’s individuals who make decisions, not faceless departments, companies or markets.

Please remember, “News” by definition thrives on newness. In all these communications, focus on, “What’s new?”, “What’s changed?” and headline & draft accordingly. Journalists and social media commentators alike will only promote releases that are genuinely newsworthy.

Feeding Champions

We spoke in STEP #2 about “Customer Champions”, individuals who have the vision, interest and determination to challenge the status quo within their own organisations. Some are mavericks who do not command the respect of their management, but many are powerful influencers who help insurgent suppliers to overcome risk-averse customer purchasing committees.

When you find such supportive champions, latch onto them and give them every possible support to help them sell your innovation internally. You might want to give them early access to roadmaps & samples, both to emphasise their importance to your business, and to gain valuable early feedback from users who “get” what you are all about. I know of one semiconductor manufacturer that used to provide early samples packaged in distinctive red tubes to reinforce to the recipients that they were being treated as VIPs. It became a badge of honour to be trusted to receive these red tubes! 

Case Study: A mug that was useless for drinking!

My first Product Marketing job was at INMOS in Bristol. INMOS’ core innovation was a microprocessor that integrated four serial communications links (collectively known as a “transputer”), making it simple to build multiprocessor systems. This elegant and unique architecture attracted quite some Champions within our customer base. We wanted to create opportunities for these individuals to evangelise within their own organisations, so we designed a unique giveaway, a four-handled mug!

These mugs were, by design, very awkward to drink from so most often they ended up as pen holders on Champions’ desks. Passersby (remember when everyone worked in the office 5 days a week – ask your parents!) would ask “What on earth is that?”, creating the perfect opportunity for the Champion to launch into the benefits of transputers and their links. Mission accomplished!

[I was sponsored through university by Michelin Tyre Company, whose UK HQ was in Stoke-on-Trent, right in the heart of “the Potteries” (the area of the UK historically known for producing china and earthenware). Guess who was given the task of finding a volume supplier of branded 4-handled mugs?!]

R&D are the Critical Decision Makers

In most technology sales scenarios, the customer’s senior design engineer is a key decision maker. There are lots of parts of the customer organisation that can say “No” (Supply Chain, Quality, General Management, etc.) but only one that can definitively say “Yes”, the R&D management chain. Your product needs to fit within their overall customer solution and it is the R&D team that is tasked with performing that integration. No design-in, no deal!

As we have discussed earlier in this series, the dice are loaded towards the incumbent and against the insurgent, where maintaining the status quo is the low risk path forward. This bias is present inside the R&D department just as it is elsewhere in the organisation, for example:

• Can we save time & cost by reusing an existing design for a particular function of the overall system?
• The incumbent supplier has a good quality record, I don’t want to risk changing
• The incumbent’s specification and part numbers are already in the CAD system, and their samples are in the lab.  It’s just easier not to change.
• I don’t want to have an argument with Purchasing about adding a newcomer to the Approved Vendor List (AVL)

Of course, the R&D team are under lots of competing priorities – time-to-market pressures, development costs, product costs, quality & reliability performance, supply chain resilience, etc. – but ultimately they are tasked with designing a great product, one that out performs their last iteration and their competition. This is your chance! Beyond all else, you need to convince R&D that they can build a better mousetrap using your product, whilst simultaneously minimising the friction associated with switching to a new solution.

The Value of Evaluation Systems

In STEP #2, we talked about using interesting & eye-catching demos to help drive your innovation into the consciousness of your target audience. The purpose of your demo at this stage was to highlight your key innovation in an impactful manner. 

However, by STEP #3 you have generated some interest and the goal changes. Now you are looking to have the customer visualise a clear path to integrating your innovation into their solution. This is where evaluation systems and reference designs come in.

These terms are often used interchangeably and it is important to be clear about which you are targeting.

Evaluation systems are self-contained, hardware & software combinations that allow a customer to test your proposition and validate your performance claims with the minimum of effort. They eliminate the need for the customer to kick-off a separate project to assess your product, just plug the evaluation system in and go. As such, they reduce the inherent friction in considering a new technology. They also provide Customer Champions with a platform to “spread the word” across their organisation, building support & confidence as they go. 

It is good practice to provide as much information as possible as part of an evaluation system (e.g. parts list, PCB layout files, documented source code, design guides, etc.) such that customer engineers can learn and adopt your solution as easily as possible when they want to move beyond evaluation.

Reference designs go a step further, creating a “production-ready” design that a customer can take to market almost immediately. The effort involved is considerably higher. You have to prove the operation of the design under all application scenarios and often have to gain approvals from standards bodies, e.g. CE marking in Europe. In most cases, insurgent companies have neither the resources nor the system level expertise to create true reference designs.

Some customers will request reference designs, citing time-to-market and risk reduction benefits. How to answer as an insurgent competing against larger competitors with production-ready solutions?

Most customers want to offer differentiated products, very few technology businesses operate in pure commodity markets. If a supplier can offer a customer a complete reference design, then the supplier can also offer other customers the very same thing. And having spent the time and money to develop a reference design, why wouldn’t they? They want to maximise their return on investment. So, whilst reference designs sound attractive on first hearing, in practice they risk destroying the value-add of the customer’s own R&D team, the skill of bringing together best-in-class components from across the supplier base and building the best product possible, one that their competitors will struggle to emulate. Companies that simply rely on reference designs are probably not a good customer fit for an innovative start-up.

The Critical Role of Application Engineers

I would like to finish on my “soap box”!

For technology products that require design-in, where customers’ R&D engineers are the key decision makers, knowledgeable Application Engineers are your most important resource to secure the win.

Yes, everyone has their part to play; the Account Manager has to map the customer organisation and orchestrate resources accordingly, the Operations team has to build confidence in your supply chain, similar for the Quality team, commercial terms have to be acceptable to both parties and the Senior Management Team needs to demonstrate full commitment to the engagement. But all of this is irrelevant if you are not specified in the design; NO QUALIFICATION = NO SHARE, and that means your engineers talking to their engineers!

If you are a small start-up, you probably will not have a network of Field Application Engineers (FAEs) across your target territories. More likely, you will have to rely on a central AE team that supports customers remotely. My advice? Put AEs in-region as soon as you can afford it. The inertia associated with sticking with tried and tested solutions inside customers is so strong, it really needs local expertise to unlock the potential. Even post-Covid, nothing beats being in the lab with customer design engineers.

If you are a larger organisation entering a new market, you may have the luxury of an existing FAE team but please do not be complacent. You are still the new guys in town (otherwise you are not an insurgent) and you will need to provide intensive training to bring the team up-to-speed on your technical proposition and how it can be applied.

Start-up, or emerging Product Group of a larger company, never rely on distributor FAEs to do your design-in work. These guys have to represent multiple manufacturers and their FAEs necessarily have knowledge that is a mile wide and an inch deep. And strategically, it is not typically in the interest of distributors to challenge the status quo, especially where they have incumbents on their line card.

---