Life Cycle provides a helpful visual timeline for estimating how the average consumer spends each hour in a day. NORTHCUBE.
Shawn Carolan of Menlo Ventures does a great job of giving examples of BFS, the Better, Faster, Cheaper ways that startups can differentiate themselves in the Forbes article Nobody Cares About Your Big Idea. People do care about one thing: What’s in it for them?
What sets successful consumer tech startups apart from the fads is how their products impact customers’ two most precious commodities: time and money. We’ve all heard the saying better, faster, cheaper; this is how to apply it with precision.
He gives a lot of great examples, like how Spotify successfully entered a market dominated by iTunes. However, one point he doesn’t make is that there are two ways to impact customers money: help them save it or help them make it. Obviously the former is for the consumer market, but the latter can be critical for the enterprise market. Salesforce is a great example of a successful startup that helped enterprise companies make more money by providing a much better CRM (Customer Relationship Management system) to their sales force, thus making them more productive. All of the successful companies Shawn lists are B2C, which are great for B2C startups; you are left to find your own B2B successful startups, a good exercise for you, if you are targeting the enterprise!
Here’s his last words on the consumer market:
Ultimately, the hardest part can often be picking a small, single challenge to get started on. Many opportunities remain for consumer tech to make a positive impact, including addressing key issues in transportation, housing, lifelong learning, mental health and much more. None can be solved easily, but by having a crystal-clear picture of your product, it’s still possible to capture customer attention in a busy and distracted world. Consumers will always look out for their own best interests, rather than yours. When both can be met simultaneously, great new companies are born.
There are many issues not covered in this relatively short post, of course. One of the major ones is are you a vitamin (nice to have) or a pain pill (must have)? This makes all the difference in the world in the B2C market, though it must be said that vitamins did become a billion dollar market!
It’s great to see advice for startups from someone who is both a founder and an early stage venture capital investor. Menlo Ventures was the first VC investor in Roku in 2008. Roku recently changed their business plan and that change, from just selling hardware – which is where they started – to selling subscriptions to streaming services, is a great example of an early stage company migrating to an adjacent market.
It is easy to figure out what cheaper is. And it’s usually not hard to figure out what makes a product faster. But Better needs to be defined. Amazon did a great job of providing better in two dimensions: ease of use, with their One-Click buying option, and a huge selection of products, far beyond what any brick and mortar store could possibly carry.
So the exercise I leave B2C founders (aside from reading Shawn’s post) is to determine just how you are better. Because I’m a firm believer that being cheaper means competing on price, which can result in a race to the bottom. Being faster may or may not result in a sale. But better to me is the sales maker. How is your product better than competitors or the current way customers are solving their problem?