Three Signs Your Product Is Going To Sell (or not)
I work with founders of early-stage startups every day.
They all have products they build and try to sell.
But some are selling, some aren't.
Today I want to tell you my view on the products that sell and those that don't.
My view - to be honest - is never so important 😅 but today, it may be for three simple reasons:
I'm fractional, which means neutral and impartial, and I have fresh eyes to see things from the outside.
I have been in sales all my life, selling and helping sell hundreds of products and services.
I'm in the market daily, talking to founders, and I get a holistic view of what's good or bad about products.
Inbound vs Outbound
The first sign you have a product selling or not is simple: are you getting inbound requests? Yes or no?
If yes, you will likely have something in your hands that will sell.
If not, you lack marketing and awareness, or your product isn't attractive.
Suppose you have to build a company and want it to cross at least the first 1M ARR.
In that case, I recommend attracting people to your site, LinkedIn, Instagram, or content hub.
In my case, it's Linkedin.
I consistently post on LinkedIn and have a strong and curated following there. My inbound comes mostly from there.
If people consistently contact you asking for information, wanting to talk to you, or seeing the product, you are in a good place.
Disclaimer about Ads:
Paying for ads before the 1M ARR is strange unless you sell something easy to find (B2C) on Meta ads.
However, if you are selling B2B, I do not recommend starting to pay ads before the 1M.
You want organic growth to validate your product and offering.
The 2 Key Metrics
Discovery vs Proposal and Proposal vs Closed Won.
The most significant metrics that will tell you if your product is going to sell are 2:
Discovery Call vs Proposal
Proposal vs Closed won
How many proposals do you get from 10 discovery calls? 6-7 at least? Good. Less? Not so good.
How many did you win after you sent pricing? Likely 4, but 3 isn't bad. Five is perfect.
Referrals
When Gong.io launched into the market, one statement always stuck with me: "We don't want only users. We want raving fans."
Well, that's what you want too.
If you want people to talk about your products in the best possible way, include your name in every WhatsApp or Reddit chat.
You want people referred to you who have already come with trust.
Win rates from referrals skyrocket, hitting sometimes 40-50%.
A bonus point
Your churn rate has to be in the single digits.
Of the total number of customers (baseline) who are supposed to renew their contracts, how many are cancelling?
If we talk in the single digits, we are good.
If you go above that, there is something we need to do.
It can just be a customer success motion, or there is something fundamental in your product that strikes curiosity but doesn't deliver impact.
Final Thoughts
Not all successful products hit all three metrics I have shown you here, but at least they hit two out of three.
But if your product neither gets inbound referrals nor consistently fails to hit the proposal metrics and win, you should consider a strategy to get at least 2 out of 3.
Building products is not for everyone, so I'm happy with my consultancy business 😅...I know it's hard, but the best products out there were never born from the beginning.
They were at some stage pivoted, changed, and re-adapted.
You can always do something even if now isn't going as you wish.
Start looking at those metrics and getting some sense of what will sell.
That's already a great start!
Thanks for reading this far, see you all next week same time same inbox.
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P.S. If you missed my other newsletters, don't worry; you can catch them here.
