What we’ve learned about validating US product market fit during a crisis
At big bang factory, we are obsessed with helping foreign startups succeed in the U.S and build global businesses. We work with founders to AB/test their solution with the same principle: “fake it until you make it”.
We strongly believe that many of the toughest questions facing a U.S market fit can be answered before there is even a full tailored product for the local market.
Over the last few months, COVID outbreak has led us to push even harder into our U.S market validation activities. We know that everything feels riskier now: the headwinds seem real, selling is harder, customer preferences are changing overnight and the investment climate is unpredictable.
In light of these challenges, we have found this set of tactics particularly helpful. If you are a founder with U.S ambitions, we hope they will be useful for you too.
Accelerate and emphasize customer discovery. Sometimes it just got easier.
As we validate, we identify the buyer personae, sponsors, opponents, referral sources and Key Opinion Leaders. We talk to them early and often. We are often fortunate to have someone in our network and we pull that card, but other times we rely on the cold, hopeful email.
To scale the approach and get feedback quickly, we define a lean marketing automation strategy starting based on the Unique Value Proposition. Then, we build different email templates with marketing materials attached and finally we talk and generate demos.
All of the sudden, unanswered InMails and phone calls went answered. The message we got from customers was consistent: “Who knows what the next year looks like? I’m ready to experiment.”
Testing Is Really Cheap Now.
As we validate and AB/test a solution for the U.S market, we take whatever we have, from an MVP, a demo, or even just a set of value propositions with adapted marketing materials and put it in front of potentials clients and stakeholders of the value chain. We do it thanks to our private network in the U.S or through various tactics, from cold calls, emails or ad/social network platforms. These tactics generate plenty of precious insights in measuring the potential demand and pricing model. With so many companies cutting ad spend, it is far cheaper to test value props and product concepts.
Tracking the impact of the COVID-19 pandemic on the digital advertising over the past few months might give us a good indicator.
Let’s dig just a bit deeper.
Advertising prices as measured by the Cost per 1,000 Impressions (CPM). Gupta Media, a digital marketing agency has tracked it over the past few weeks. As an example, Facebook Ads have declined to historic lows as many advertisers have pulled back their spending, while usage and time spent on Facebook and Instagram have exploded.
Here is the result: the average CPM in the United States across Facebook and Instagram was $5.14, and has since been dropping steadily ever since — falling to $1.96 on April. That is a 62% price drop in less than a month.”
Of course, if your business relies heavily on digital acquisition, don’t assume that these economics will last forever. Enjoy them for what they are, an inexpensive laboratory for rapidly iterating and de-risking your U.S product market fit.
Think Creatively About validating the U.S market remotely before spending tons of cash.
If you face any challenge to validate or scale in the U.S, let us know.