Building a product is not the challenge – building a business is. Silicon Valley investors often lead entrepreneurs astray according to two-time unicorn founder, Ashutosh Garg. During our conversation about founder wisdom, he rejected the conventional wisdom to do one thing, stay focused, then be super successful. His experience is that the truth is the opposite of that – you need to “get married to the market, not the product.” You have to identify a big market, maximize your “wallet share” in that market and then build products that will capture that share. Focus on your wallet share, not your product.
Understand who is the buyer; what motivates the buyer; and how much they spend. Music to a marketer’s ears!
Per this world-class engineer, now CEO, it is sales processes (consumer or B2B) that are the most effective way of testing demand. It’s way cheaper to test demand and value proposition than it is to build the product.
- Hire an SDR;
- Give them a pitch;
- Call 100 companies to see how many will take the meeting
If those meetings don’t convert into sales opportunities, then you have your answer – there is no market for what you want to build.
At the end of the day, it’s not about building the product; it’s about building a successful business. Ashutosh suggests that often, Silicon Valley investors push founders to rapidly prototype product focused on one problem as the route to super success. This is not necessarily the best advice. The best approach is to focus on the market first, test demand and then build a product around the demand that resonated. This approach to product-last has been the foundation of Ashutosh’s success. By listening to the customer, understanding the market and testing demand through sales, entrepreneurs can increase their chances of product-market fit. In Ashutosh’s words, focus on the wallet share competition – not just getting a share of the pie but having more than your fair share.
This approach transcends initial offerings into expansion products. When Ashutosh founded Eightfold.ai, he focused on leveraging massive data in applicant tracking systems to better identify potential talent and minimize bias. Then, Ashu met a leader at Tata India. They said you promised us that in addition to identifying ideal talent from large data sets, we will be able to search across our employees as well as applicants. In serving the market, Ashutosh realized that talent acquisition makes sense but talent mobility was new – and with Covid, internal mobility became crucial. As Eightfold.ai continues to focus on wallet share, offering solutions for managing and developing flexible talent have been introduced. Eightfold.ai created new products to capture more wallet share from their motivated customers. But each new product was market demand tested through sales before anything was built.
With his contrarian approach to maximize wallet share for his core buyer, he has built two unicorns – Eightfold.ai and Bloomreach. Most people give up too soon – it’s not about the product, it’s about the market and wallet share.