In the past few months, I’ve spoken with over a dozen startup founders. My goal is to understand their struggles with scaling after they’ve found early traction. In other words, they’ve gone from zero to one, but now what are they experiencing as they go from one to ten?
My conversations uncovered a pattern that unfortunately too many companies are blind to, and it is the cause of plateaued growth. In a nutshell, they are mistaking early adopters for widespread adopters. It’s a simple mistake with massive implications.
Early vs. Widespread Adopters
There is a common misconception about who early adopters are. They are people with pain so acute that they have gone looking for a solution. They’re willing to be vocal. They’re also extremely long-suffering. In other words, they are great at telling us exactly what they want and are willing to put up with a lot of garbage to get it.
Widespread adopters are different. Their pain is less intense, so they’re willing to wait. They already have a “good enough” solution, and before they switch, they want to be certain the new solution — your solution — is better and more reliable than the alternatives. Widespread adopters are also far less forgiving and vocal, which means if your product isn’t just right, they’ll churn, and you’ll never know why.
The Problem with Early Adopters
Lest you think I’m anti-early adopter, I just want to be clear that early adopters are a vital part of your business’s development. Without them, you never get early traction. However, as companies are bridging the gap between early market traction and widespread adoption, early adopters can become a stumbling block in two very important ways.
First, if companies assume early adopters are their widespread adopters, they will think their minimum viable product that has traction with early adopters is a product/market fit. When they do, they throw all available resources to sales and marketing. What they get is an unsustainable business model with a product that does not meet widespread market demands, with monumental customer acquisition costs – which current investors avoid like the plague.
Product/market fit comes later, once you’ve developed a clearly differentiated minimum adoptable product that appeals to widespread adopters because it contains the features and benefits needed to help customers create the outcome they want.
The second problem occurs when early adopters steer the ship. They guide you to build an extremely niche product that resolves their issues but isn’t relevant to the market en masse. Company revenues stall out between US$2 and US$5 million because you have an extremely niche product that isn’t attractive to widespread adopters – another situation investors avoid. If your sights are set higher, you’ve only got one choice – figure out your widespread adopters.
Growing A Garden
Think of your business like growing a garden. You plant seeds and they start to sprout. These are your early adopters. They’re not the same as a mature plant that’s ready for harvest – the widespread adopters. They have different needs and while most sprouts are edible, if you only eat the sprouts, you miss out on the full harvest and all the wonderful flavors it brings.
A Warning
One company I worked with had early traction and made this mistake. They had landed a few major clients and assumed they had found product/market fit. What they had was an unstable, unreliable product that only appealed to early adopters. The CEO and customer success manager spent most of their time trying to slow the incredibly high customer churn rate that was killing them.
The company tried every solution, except going back to the basics – identifying widespread adopters and the outcomes they were trying to create, which would have helped them focus on which features had to be stabilized first. With a stable, reliable product, churn would have become a non-issue.
Unfortunately, the company never figured it out and years later they are still plateaued at low 7-figures.
Finding Product/Market Fit
For early-stage startups, the goal is to take one solution, find product/market fit, and go from a few early adopters to many widespread adopters. But, what my research uncovered was that because companies didn’t understand the differences between their early and widespread adopters, they made critical mistakes that prevented them from finding product/market fit and blocked their growth instead of promoting it.
To successfully bridge the gap between early traction and market adoption, companies have to shift their focus from understanding and meeting the needs of early adopters (the sprouts) to understanding and meeting the needs of widespread adopters (the mature, ripe plant). But to do that, you’ve got to recognize the difference and build your product and business model on their common desired outcome.
At the end of the day, don’t mistake your sprouts for the full harvest. Sprouts are delicious and nutritious to a point, but they’ll always leave you hungry for more.
Contributed to EO by Zac Stucki, a growth strategist who specializes in helping early stage SaaS companies bridge the gap between early and widespread adoption. As the co-founder of Ignition Point Strategies, he moves SaaS founders from early traction to growth by using data to create a deeper understanding of your customer. Zac is also a sought-after speaker and workshop facilitator.
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