Startups Must Focus Their Initial Use Case

As a founder of a hardware or software platform with potential applications across many markets, it’s natural to want to showcase your solution’s broad capabilities to investors, customers, partners, and distributors. The cumulative opportunity is indeed massive. However, to successfully raise money and execute effectively, you need to focus on a single use case.

To capture attention during your pitch, you must identify a clear target market and a compelling pain point that your solution addresses. This is most persuasive when built around one type of customer and related pain points, demonstrating your deep understanding of their specific needs. If you try to cover too many use cases, your pitch risks sounding overly broad and generic.

What is a Use Case?

A use case for a startup company is a specific example of how the company’s product or service will be used by a target customer to solve a particular problem. In essence, it’s a scenario that demonstrates the practical application of the product to fulfill a need, providing a clear picture of its value and relevance in a specific context. For a startup, defining a use case helps clarify the target market, refine the product’s features, and strengthen the pitch to investors and stakeholders. The main elements include:

1. Target Customer: The specific type of customer or user that the startup’s product is designed to serve. This includes demographic or business profile details such as industry, size, or role within a company.

2. Pain Point or Problem: A clear description of the challenge or problem the target customer faces, which the product or service addresses. This should be a real, pressing issue that the customer needs to solve.

3. Solution: A concise explanation of how the startup’s product or service directly addresses the pain point or problem, highlighting unique features or capabilities.

4. Value Proposition: The main benefit the customer will gain from using the product or service. This could be cost savings, time efficiency, quality improvement, or other specific advantages.

5. Customer Needs and Expectations: Any specific requirements the customer has for the solution to be successful, such as ease of use, compatibility, reliability, or particular features.

6. Competitive Advantage: How the startup’s solution is superior to alternatives on the market, outlining unique aspects that make it the best fit for this use case.

7. Metrics for Success: Quantifiable outcomes that indicate the success of the solution for this use case. Examples might include reduction in time, increase in productivity, customer satisfaction scores, or cost savings.

8. Example Scenario (Optional): A hypothetical narrative that walks through the steps a target customer would take to use the product in their day-to-day operations. This scenario brings the use case to life and helps investors or stakeholders visualize the solution in action.

Benefits of a Single Use Case

Focusing on a single use case allows you to tell a stronger story, and although it may be challenging to choose one path, doing so provides you and your team with clarity and impact. Here are the reasons why homing in on one use case is crucial:

1. Enhanced Pitch Clarity: When you target a single market with a single pain point, you can vividly bring that issue to life. Multiple pain points dilute the message and can confuse your audience. It can be too abstract rather than specific.

2. Focused Product Development. Startups often try to build too big of an initial product, which costs more money, uses more resources, takes more time, and introduces more complications. Focusing on a target use case can simplify and speed the process.

3. Technical Feasibility: Different use cases often demand unique adaptations, whether specialized libraries, data sets, interfaces, or compatibility requirements. Attempting a one-size-fits-all solution risks creating an unwieldy product that serves no market well.

4. Aligned Value Proposition: Each market may prioritize different aspects of your platform, ranging from cost to precision. Trying to convey multiple value propositions weakens your message and may lead to conflicting perceptions.

5. Focused Go-to-Market Strategy: Diverse markets often require different sales approaches—consumer direct, major accounts, or distributor-based strategies. Juggling these diverts energy and resources, reducing your effectiveness in any one channel.

6. Maximizing Impact: It’s better to execute one thing excellently than to struggle with many. Consider it like catching tennis balls: if someone throws you five in quick succession, you can catch each. But if they throw all five at once, you’ll likely end up with only one or even none.

Focusing on a single use case also lets you map specific pain points directly to your value propositions, customer needs, and competitive advantages. This alignment makes for a compelling story, as in this example:

Starting with one use case doesn’t mean ignoring your platform’s full potential. After establishing traction in your initial market, you can introduce your vision for future use cases to show the broader scope of your platform. The broader uses can be one of the last slides in your pitch deck, showing your startup has space to expand.

Criteria for Choosing Your Initial Use Case

Selecting your first use case is a strategic decision and shouldn’t be based solely on market size. Consider these additional factors:

• Time to First Revenue: Early revenue can fuel growth and attract investment. The ideal market might be one where you have existing relationships, urgent demand, or rapid decision-making cycles.

• Tolerance for an MVP: Some early users may be more forgiving of a minimum viable product and willing to work through issues, whether with feature gaps, a rougher interface, or stability concerns.

• Availability of Partnerships: Strong partnerships can ease market entry. If you have industry partners eager to collaborate, this might be your most viable initial path.

• Access to Grants or Non-Dilutive Funding: Certain use cases may align with funding opportunities, helping to subsidize development without giving up equity.

In the end, this focused approach is about telling a powerful story with a single use case. After gaining traction, you’ll be in a stronger position to expand and convey your broader vision. This is a challenging choice but an essential one for startup success.

"Let’s Talk at 6 on 3/4"

I am dismayed to see the communications difficulties when growth companies start to do business internationally, then fail to be specific about dates and times. How many times have you seen an email subject like “Let’s talk at 6 on 3/4” exchanged between the New York and London locations, and wondered: 6am or 6pm? Whose timezone? March 4th or April 3rd?

This happens even when many of the employees are worldly themselves, but have fallen into the shortcuts for their countries. Too few Americans seem to know, for example, that everyone else in the world writes day/month, rather than month/day, or uses the international date format of year-month-day. The problems often get ironed out when one or the other sends along an Outlook or Google calendar invitation, so long as both parties have their location and time zone settings set properly.

Just the same there is often misunderstanding while setting up the meeting. It would be so easy to minimize this problem if everyone followed three simple rules:

1. Use am or pm with a time (6am or 6pm), or write in 24-hour clock format (6:00 or 18:00)

2. Specify which time zone

3. Agree to use international date format (year-month-day) or spell out the month name (Mar 4).

Happy meeting. I will withhold my rant about the superiority of the metric system for another time and place.

Towards Needs-Based Segmentation

Most companies try to segment their markets, and most do it badly. So many work for months to create a "universal" segmentation scheme, only to make things worse. Here is a better way to think about segmentation.

First segment customers differently than prospects. It makes sense to segment customers based on factors such as 1) total revenue for the account, 2) higher versus lower price plans, 4) products purchased, 4) potential revenue growth, and 5) length of time as a customer. These factors may reflect the different needs or value of customers. These types of segmentation can help the customer service team discriminate by the level of service -- phone versus email-only support, phone center hours, phone wait times, etc. Segmentation for prospects should help target the right messages at the right buyers, so separate prospects based on needs. Prospect segmentation can also help define which marketing channels to apply to which targets, which is more a measure of the revenue potential.

When thinking of needs-based segmentation, this article and video from Clay Christensen offers great advice. He calls his talk "Milkshake Marketing", and poses the question "for what task does the customer want to 'hire' the product or service"? This approach requires some fundamental thinking about the role of products, and goes way beyond traditional demographic analysis. It can lead to new insights about customer needs, and can target messages more accurately.

At the same time, marketeers must ensure their segmentation schemes are actionable. This may run counter to some of the Milkshake Marketing insights. But in the end segmentation needs to drive action programs, or else it is purely an intellectual exercise.

Strategy Statements - Avoid Getting Wrapped Around the Axle

Just about every company goes through a process of creating their vision, mission, and strategy statements. Start-ups especially must do this to attract investment or document their latest pivot. Sometimes the companies hire consultants. Sometimes they arrange a one- or two-day offsite meeting with senior management. Sometimes the CEO hands the strategy down to management.

Most of the time though companies end up with a big PowerPoint deck that contains many $100 buzzwords, describes their role in tectonic industry trends, but fails to come to a point. The leaders celebrate the completion of the document; they present it to management and staff; and everyone continues doing what they were already doing before the exercise.

Keep in mind that planning is important despite these misadventures. Dwight D. Eisenhower said: "In preparing for battle I have always found that plans are useless, but planning is indispensable." So by all means plan.

Here are my top seven guidelines for writing effective planning documents.

1. Write a Strategic Intent Instead. Avoid the pointless discussions about what elements fit in the vision, objectives, goals, mission, values, or strategy documents. Write a single document that includes them all -- from where the company wants to go to how it plans to get there. Call it a Strategic Intent document.
2. Keep it Short. Several good blog posts on the topic, including Forget the Strategy PowerPoint and The Art of Crafting a 15-Word Strategy Statement make a strong case for fitting the planning document on one piece of paper. That forces clarity and conciseness. And it is easier for the staff to understand.
3. Make Choices. The reader should understand what the company will and will not do. Be specific about the success measures, target markets, time frames, technology platforms, make-versus-buy-versus-partner choices, and go-to-market channels.
4. Solve Problems for Target Customers. The best strategies meet market needs, rather than describe actions in a vacuum. Meeting a market need requires specifying a target customer, a use case, some need or pain point, and how the company plans to meet the need. Otherwise, what makes the company unique?
5. Specify Action. Passive voice kills strategy statements. Something important just magically happens? Good strategies describe clear action programs. 
6. Leave the Tag Lines for Don Draper. Having an "elevator pitch" is helpful, especially if it ties in consistently and logically with the whole strategy. But a strategy is not the place to create the catchy, 2- to 3-word catch phrase. That is for the ad agency or the marketing types, once everyone agrees on the overall strategy.
7. Plan for Phases. Just as Generals say "no battle plan survives the first shot being fired", strategists say "strategy ends when the team takes the first action, and the rest is tactics". Strategies should contain big dreams as well as near-term plans. Think big and act small. No one can predict the market or competitive conditions for phase 3, so there is no need to be highly specific about the strategy for that phase.

Create Demand for Your New Category

I often get pulled in to marketing discussions about whether to lead with brand or with category. We usually go round and round, and never resolve it. 

However, the book Origin of Brands puts this argument to rest and provides great advice around building a brand. The authors are Ries and Ries, the senior of which co-wrote the seminal marketing book Positioning.

Their premise is that brands (like species, thus the title homage to Darwin) are constantly splitting. For example, about 70 years ago computers were a single category. Now we refer to desktops versus tablets, and 7" tablets versus 9" tablets. Every sizable category may split if there is customer demand. 

As a result the authors recommend that marketers build their brands in the following way:

1. Name and create your new sub-category. Identify a sub-category that meets a need better than the original, broad category. 7-up did this when creating the "un-cola" sub-category for people who want a soft drink but not a cola. And Google did this by creating the 7" tablet sub-category, for people who want the tablet format of an iPad, but in a size that fits in the hand.
2. Promote your category. The authors recommend using PR rather than advertising for this. But I am confident they would recommend Social Media as well today, with the advent of Twitter, Facebook, and Google+. The key is to get the audience to want to buy they new sub-category. The authors use the example that a TV viewer goes into the kitchen to get a light beer, not a Coors Lite; they select the category they want, then grab the brand that best fulfills it.
3. Deliver on the promise as the best product or service in that category. Be the best company at delivering on all the customer expectations for your category. Make sure you are number 1 in reality as well as perception, and you never let that slip. 

By so doing, companies can win the "top rung" on the positioning ladder -- the core theme of Positioning. Owning the top rung of a substantial new sub-category is far more profitable than being an also-ran within a larger-but-established category. Some would argue that a new product should be 10X better or cheaper than the current options, or else there is no reason to launch it.

I believe this lays out an effective blueprint for marketing. Many of the examples in the book address consumer marketing, but I find the approach applies equally to business marketing. 

This approach also gives a real purpose to the use of social media. Many companies today lack focus for what they want to do with social media. Engage with customers? Promote their features? Share funny cat videos? The primary role of social media should be to create demand for the sub-category, rather than pump out the equivalent of product brochures on Facebook. That is why so many marketeers today embrace the idea of content marketing, which delivers value to the audience. 

What sub-categories have you created? Are you creating demand for your new sub-categories?

A Far Better Way to Write Documents

How often do you sit through presentations that contain so much text that the font size is unreadable from even the front seats? Then the presenter turns his or her back to the audience and reads the slides verbatim? 

How often do people share their slide deck as a record of the meeting, but no one can figure out what it says a few weeks later because the deck is full of pretty pictures and vague bullet-point topic sentences? 

How often do you sit through a meeting that is supposed to be collaborative but the presenter runs out of time just presenting the deck, with a slow reveal of the insights or recommendation?

Most people would answer "frequently" (if not "always") for each of these questions. In some cases the writer should take the blame for poor writing or communications skills. However, the real underlying problem is different circumstances require different document formats. A good presentation should provide minimal graphic support, so the audience pays attention to the words and makes eye contact with the presenter. By design, such a presentation makes for a poor leave-behind. In my days at McKinsey years ago company policy forbade us leaving a copy of the slides as the only documentation. We had to either write a complete text document to describe our findings and recommendations, or annotate the slide deck to make it more descriptive. 

Yet so many presenters today try to split the difference. They put enough on the slide to satisfy the documentation need, but still have graphics to make the presentation more interesting. They end up accomplishing neither. I almost scream each time I hear "I am sorry this slide is so tough to read" or "I apologize for this eye chart".

This paper on SlideDocs by Nancy Duarte impresses me. It is an interesting read. It is a game changer. I am already putting this approach to use in my businesses.

The key points are:

1. Most people should share papers in advance of the meeting, so the group can use the time for discussions rather than presenting.
2. We live in a visual time, so the visual impact of photos, graphs, tables, etc. are important in a document. We should borrow lessons from visual media such as Wired Magazine and Flipboard.
3. The document should work as a stand-alone, which requires the more detailed text to tell the story. If the presenter wants to show some or all the pages in a presentation later, then he/she can remove the text and rearrange the graphic elements for visual appeal.

Duarte suggests people use PowerPoint or the equivalent. I believe Google Presentation is a better choice. It has nearly all the graphic functionality of PowerPoint. Teams can use the collaboration tools to create and edit the document together. The audience can view the presentation on just about any device with a browser, with no need to own or open the PowerPoint app. The presenter can share a web link with the audience members, so they do not have to open a file. And the presenter can make adjustments to the presentation before the rest of the audience views it, in case an early reader points out some typos or the like. 

Give it a try. My bet is most of us will be using the term "SlideDoc" before the year is over. And our meetings will be more effective.