Changing Behavior

The importance of acquired behaviors when launching a product is overlooked, it runs against innovation and creating new market opportunities. But there are hidden costs in reinventing the wheel: shaping new behaviors can be even more daunting than facing competition.

One of the toughest issues to deal with when starting a company is that nobody knows you. While obvious, its implications span beyond what most people think. It is also something difficult to acknowledge from the inside since it usually goes unnoticed amongst the team due to its availability bias. They are spending an insane amount of time working on it, thus creating a huge perception asymmetry between you and the rest of the world.

Ultimately this can lead to poor product decisions based on what you believed to be true, rather than what the rest of the world actually knows or thinks about your product — which tends to be approximately close to nothing.

This idea is not a binary subject, though. For instance, if your product is a direct substitute for something your user has already been using for a long time, you are mostly dealing with the problem of awareness.

Communicating the product’s value prop, its uniqueness, and why the prospect should care, might be enough for your niche to get started. Don’t get me wrong, standing out from the crowd is not an easy endeavor, but at least the battle for “why I need this product in the first place” has already been fought.

If your product is good enough to substitute the one they’ve been using, the moment you get the chance to deliver on their expectations you’ll have higher possibilities that your customer sticks to it.

This is not what happens at iomando.

It is true that we aim to substitute something that already exists, such as keys and remotes. But we do it in an entirely different fashion — the awareness battle still awaits us. The main problem we face is that our potential customers don’t know that opening doors with a phone is even something they can do.

On top of the awareness problem and the fact that nobody knows our company, we have to layer the fact that most people don’t realize that what we do is even possible.

Therefore in order to bring in new customers, we needed to execute in three areas.

  • Create awareness so our name resonates within the market.
  • Explain that opening a door with a phone is possible.
  • Deliver a great experience, so the moment they try the service, they don’t want to ever look back.

Getting the attention of potential customers, especially at the beginning, can be tricky. This is a problem all new companies will eventually face, but on the other hand, the Internet is surfacing a plethora of new niches that were not available before — making it easier for vertical products to capture.

The catch, of course: mastering a certain niche is getting more and more expensive, thus you have to balance how hard it is to own it versus how big it is the opportunity behind the niche.

Ben Thompson nailed the idea in his weekly article about P&G and its strategy shift:

I think that means the opposite is the case for smaller players: the Internet may be noisy, but it also makes it possible to identify and reach niches that were previously too hard to segment or reach at a scale great enough to support a business. As I wrote last week, independent app developers ought to pursue a niche strategy, but so should writers, musicians, and even CPG startups.

Another related misconception I wanted to tackle is the idea that coming up with a “brand new” product or service that has no prior matched behavior gets you the blessing of having no competitors.

In my experience, having no competitors doesn’t help either — and I’d even argue it is not a good thing.

  • First of all, the world is big enough that if nobody is also exploring the same space, I would worry whether the opportunity you’re pursuing has value at all.
  • Second, creating awareness alone is a bad place to be. Competitors will definitely help you heat up the place — when the market is not yet saturated.

In other words, nobody dies from competition in the early days. The opportunity remains huge so it won’t be “them” the ones lowering your prospects of success. For the reasons stated above, even a big player entering your space is good news, because it has recognized you market as a good business opportunity and it will also bring attention to the niche.

For instance, some people at iomando thought we were doomed when Apple released HomeKit — yet that very week, we saw — by far — the highest amount visits hitting our website and also scored a 15% increase in sales MoM.

What HomeKit did for startups in the space of the Internet of Things (and specifically related to appliances and utilities) was to light up the entire market and show the world this is an important category everybody should be paying attention in the future.

The takeaway would go along the lines of whenever you launch a new product, ensure the category is well understood and maps to existing customer behaviors, otherwise, you’ll have to also fight the battle of explaining that the thing your product does is even possible. On top of that, keep in mind that given your product retains a unique edge, competition is not bad, but encouraged.

As a final remark — related to taking new ventures off the ground — I wanted to mention that during the building of iomando we’ve also come to realize the importance of retention at a deeper level. Not retention in terms of LTV, or the fact that once the customer gives you an opportunity, you have to deliver a great experience. That’s mostly a given. If you don’t, then all the efforts to bring the customer to your door render themselves worthless.

What we’ve noticed is more about how to engineer retention in a way that is strategically built into the product. For instance, these days we see a lot of products trying to keep you engaged by sending timely notifications, emails, messages… Push after push, they are trying to reshape your habits so you can make some room and fit their product in.

iomando is different in this regard, because (once the battles of awareness are settled) its value does not rely on a “newly acquired behavior”, but something you “have to do” you like it or not: opening doors.

Once the users have installed the app, they will be coming back by themselves any time they need to access the place. In other words, the need for our product comes from an intrinsic motivator, rather than an external one. Of course we have to deliver value — otherwise, users will fall back to their keys and remotes. But we don’t need to remind them about its use case since it is already ingrained within a social or behavioral construct.

First published on April 12, 2014