5 Product-Market Pipeline Mistakes that Destroy Startups - And their Solutions

There is endless number of things that could go wrong in the beginning of a new venture. However, a few mistakes appear more frequently than others. These 5 landmines are the most common mistakes which can kill a fledgling business.

1. Founders assuming They are the Target Customer

I’ve found so many entrepreneurs, including myself, guilty in this at some point or another. It’s very tempting to think that we are the ideal customers and we can represent their needs and wants, but these thoughts are fundamentally wrong.


Steve Blank offers a full guide to validating and building your business, with a focus on the important conversations you need to have with your customers to explore the market. He also explains in a plain language how customer discovery should be built into business’ DNA.

2. Building and Marketing Before the Idea is Ready

While quality is important, it is almost always a redundant task when odds for pivot are very high. Not only does it costs money and consume resources which could’ve been dedicated to something else, but product development also creates a commitment on entrepreneurs’ side who then tries to prove that their assumptions works - rather than deciding to pivot.


Work on a minimum viable product, start by using lean startup methodologies. First implemented at Toyota during the post-war era as "kanban" when the company didn’t have enough resources to compete with Ford, the methodology offers a smart (or “Lean”) way to grow a business and be smarter than the competition. Being the first on the market with the final product is much more important than getting stuck on a beautiful landing page with a reliable contact form.

3. Consider the Product to be for Everyone

Not focusing on a specific target market is like going to hunting and shooting in the air in hope of having dinner fall from the sky. Without understanding your buyer, you'll have a hard time creating advertisements, prioritizing features, and talking about the problem you're solving.


Define a strategy and stick to it, which includes knowing your first adopters in excruciating detail -- down to when they wake up in the morning. Choose a market segment that is most likely to become product’s early majority, and target all your marketing at them. According to Geoffrey Moore, adoption of products looks like this.

Start conquering your market by engaging “innovators” who will tell about your product to “early adopters”. Then the key is to choose a beachhead (a small market segment with the greatest likelihood of adoption) within the early majority and dedicate all resources in reaching 100% penetration in that segment. Facebook started with Harvard students, Palantir offered niche fraud detection services, and Tesla launched a small batch of ultra-premium electric cars for trendsetting buyers. Follow their strategies of niche adoption markets.

4. Creating the Wrong Flow

The user experience is key - but is often dismissed. This one is an easy mistake to make because only recently has the industry started talking about what actually keeps users engaged and what makes them come back to the service. 


According to Nir Eyal, usage of many products consists of a trigger (a call to action), a simple action (click), a variable reward (something users like), and investment (some commitment to the service). According to Eyal, there are many hooks involved in most successful products and through more hooks users go – the mode loyal they become to the service. A flow that is good will be obvious to users, but a flow that follows the Hooked model will keep users coming back again and again the way Facebook's notifications do.

5. Increasing Traffic Rather than Refining the Funnel

This can apply to anything from a web startup to a city which tries to attract and retain immigrants. In some cases there is an excessive focus on the first step – making as many prospects as possible to go through the first step hoping that some of them will stick and continue -- than on converting and retaining the maximum number of users.


Track your analytics and see your users across your app! Tools like Mixplanel allow online services to refine their funnel. Other industries can build same funnels by drawing them on paper. The key is to find the weakest point, and fix it. Learn more here how Andy Johnes did it with Facebook, Twitter, and Quora or here how Casey Winters did it with Pinterest.

Imagine a real pipeline through which we are about to transfer something from one end to another. 

If no or very little of that something we put into the tube comes out of the other end – we have to fix the leaks in the middle of the tube rather than just put more of our something into it. If those are users - they will leak through these huge holes anyway, so make sure you fix them first!

This piece has been featured on Fortune.