What are the differences between building an IoT product as an early-stage startup vs. a global enterprise?
How do you create an initial customer base?
What is the product-market fit, and why is it important?
Why should you treat your partners as customers?
Three crucial questions for the IoT startup founders to answer before starting their initiative:
- Why this?
- Why now?
- Why you?
That is just a small subset of topics covered in this episode.
Marcello Majonchi, the Chief Product Officer at Arduino, shared a lot of wisdom during our conversation.
Below, you can find my notes from this meeting.
Marcelo’s Track Record
- Started a career in consulting.
- Joined Italian startup Solair in 2013 to develop one of the first codeless IoT platforms, sold to Microsoft in 2016.
- Co-founder of Azure IoT Central.
- Worked at various tech companies such as Meta, AWS, and recently joined Arduino as Chief Product Officer.
Building Low Code Industrial Gate IoT Platform
- Startup Solair was established to build enterprise software for business users.
- The concept was to create a codeless configuration environment for IoT workflows.
- Focused on end customers and providing business value from the first development days.
Startups vs. Large Tech Corporations for Innovation
- Innovation is different in startups and large tech corporations.
- As a startup, you must build the brand, product, and customer base from scratch - focus on the growth ramp.
- Large tech corporations should focus on scale. They need to reach a massive scale in a short amount of time.
Building Initial Customer Base for Startups
- Follow the money: develop technology that addresses a real and quantifiable business case.
- According to Marcello’s theory, MVP stands for the Minimum Viable Product that is viable, valuable, and validating.
- Use PoV (Proof of Value) instead of PoC (Proof of Concept) to demonstrate business value.
Building Product Roadmap for Startups and Enterprises
- Identify trade-offs and re-embed them into the roadmap.
- Focus on very few goals.
- Plan for uncertainties such as adoption.
- Prioritize and allocate resources accordingly.
Importance of prioritization in early-stage startups
- Base prioritization on the ultimate goals of the startup and the tradeoffs required to achieve them, for example, onboarding new customers versus growing existing ones.
- Foundational elements should inform the prioritization effort and determine the roadmap.
- It is vital to have an experienced advisor to help with this exercise.
Importance of Product Market Fit
- Product Market Fit is crucial to ensure that the startup has the right product for the right customer at the right market conditions.
- It is a multi-dimensional matrix.
- In conditions where the market is not well-defined, quick iteration, hypothesis development, and validation with customers are crucial.
Validating Product Market Fit
- Understanding the business outcome that customers expect from the product and how features impact that outcome is essential.
- Customers must have a net gain from using the product or feature, or they won’t use it.
- Building a value chain, developing hypotheses, and validating them with customers helps to maximize customer value and generate meaningful impact.
- Startups should ship their product as soon as possible to get initial validation, even if it is not well-developed yet.
Create a Win-Win Scenario
- Create a win-win scenario where the customer and your business both benefit.
- Treat partnerships like customers.
- Thinking about partners as customers helps to create a healthy, self-sustaining ecosystem of partners and customers.
- It is essential to have a self-sustaining ecosystem of partners and customers working towards the same goal.
Importance of getting in front of customers early
- Get in front of customers as soon as possible, even before the product is ready.
- Demonstrate wireframes and present a click-through demo of the product to get customers’ feedback.
- The sooner you get in front of customers, the better quality and timing of feedback you get, resulting in a better product with the best product-market fit.
- Applying growth hacking strategies to product development can help in this regard.
Strategies to minimize the risk of failure
- Reducing the scope of each feature or initiative to the minimum possible helps quickly iterate and reduces the focus of each initiative.
- Have conversations with all stakeholders in the ecosystem to get multiple ideas and process more information.
- Under-promise and over-deliver to avoid overselling your vision.
- Divide your roadmap into small chunks to fail fast and reduce the impact of failure.
- There is always a risk of failure when innovating, so minimizing the blast radius of failure is essential.
Lessons from failures
- Every failure brings you closer to success.
- Understanding why you failed and using that knowledge to maximize your odds of success next time is essential.
- The three questions that founders should ask themselves are:
- Why this?
- Why now?
- Why you?
Dealing with pressure and failure as a Chief Product Officer
- The strategy is to minimize the odds of failure and the scope of failure.
- Having experience with failures in the past and learning from them can help reduce the pressure.
- Eliminating areas where you have already failed and quickly iterating and automating the focus on every sage reduces the risk of failure.
- Every failure is an opportunity to learn and come closer to success.
Importance of Timing
- Timing is often overlooked but is critical to success.
- Two aspects of timing:
- Being intentional and systematic in understanding if it’s the right timing.
- Buying enough time to be successful.
- You need a budget or side income to survive the time window critical for success.
- Understanding the conditions that maximize the window of opportunity is the single most important thing for timing success.
- It’s helpful to be a little bit early but also to put yourself in the condition to survive long enough to get to when the time is right.
Let me know what the most valuable takeaway for you!