Your First Product

The era of "software tools accessed via the web browser" is now close to two decades old, with the past few years being a relative explosion compared to what came before.

Generally, I'd characterize this as three distinct eras, the first two of which look like:

  1. The accidental successes – product development was driven by the strongest personality in the room, and success was a function of being able to live long enough to try different things. It was incredibly desireable to be a platform. Many of the successes came about as a result of sufficient wandering around in the dark until something worked, and then focusing on that. As such, the sloppiness of this era brought Lean Startup and Customer Development to the forefront of "how to startup".
  2. The land grabs – eventually, the platforms (both hardware and software) became fully installed. This, along with having a trained labor force, a clearer sense of how users do (or don't) behave online, and a more commonly understood set of business models created the perfect conditions for new startup teams to pursue opportunities that were previously perceived to be niches. These niches turned out to be large markets.  Valuations shifted from vanity metrics to more traditional business metrics.  The big winners here were Google and Facebook which became the primary conduits for user acquisition.

Today, we're on the cusp of the third era, which is a much more competitive landscape.  There's a plethora of capital in the market chasing returns, so it's harder to simply stake out uncharted territory for yourself.  Similarly, it's harder to "accidentally" pivot to success because you're now competing globally from day 1, and your prospective audience will likely have many options from which to choose.  As a startup, it's also more difficult to rely on paid acquisition, as the winner will be the one with the deepest pockets.

And so, it's become much more important to have some sort of leverage out in the market that will enable you to compete.  That is, it's insufficient to have a competent team and funding from a brand name investor.  Software can easily be cloned and capital is no longer scarce.

The best leverage for startups is to build a network of people who are critical to the success of your company.  For a consumer product, that might be influencers or early adopters.  For an enterprise product, it might be a fan base of developers (if it's a technical product) or a support group of end users, leaders, or champions.

And so, the first product that you really need to build is the one that will enable you to access and engage this group?  What is it that will cause these folks to gather around you?  To want you to win?  In some cases, it might very well just be a classical MVP of your product–a scoped down, utilitarian version that demonstrates what you are trying to do.

However, in many cases I'd argue that it's not only a waste of precious resources, but that it's way too much too soon.

First, it requires that you broaden your definition of what a "product" is beyond something that consists of bits and pixels.  Second, it will likely come through the result of experimentation and iteration.  Third, it could be as simple as a podcast, an event, an information resource, a utility unrelated to the functionality of your product, a network of peers or experts pertaining to the subject matter of your "core" product.

If you're unable to accomplish that, or if you choose not to take this approach, it's possible that you could still become successful.  However, I'd argue that you'll have a much harder time doing so, and you'd be leaving yourself open to someone who does decide to execute this strategy.

Thus, the first product you should build is the one that activate, engage and sustain the community.