Market Challenges Can Kill a Startup…
Market resistance is a very real threat to all B2B tech startups, and to some degree may be a drag on growth. You cannot launch a new tech startup without at least giving some thought to each of the factors that may impact your market presence and growth prospects. Some of them may be more aggressive than others and could pose a constant menace, while others may be manageable and mitigated successfully. Combined, these factors may pose an existential threat and imminent danger, but there are steps you can take to overcome market resistance.
Never Stop Marketing and Selling
I will never stop saying the most important part of running a B2B tech startup is the marketing, and the hardest thing is selling your solution to another business. These two functions are always a priority and will present different challenges that require new adjustments at every stage of your growth. Prior to launching your startup and continuously thereafter, you will need to review your progress against any market dynamics that may represent resistance to the adoption of your solution. The need to review this will simply grow and get more complex in line with the product categories and international markets you enter.
Here are the Top 10 Ways Startups Tackle Market Resistance:
1. Awareness and Education
One of the most effective ways to overcome market resistance is to build awareness by elevating your brand with thought leadership content. This helps educate potential customers about your value proposition. By demonstrating how your product solves specific pain points and creates business value for customers, you can build trust and reduce perceived risks. Market awareness and brand strength are key allies in the growth of any early-stage tech startup.
The best technical solution does not always win, but the strongest brand has a much better chance of succeeding and even dominating its market. Never think that at any stage of growth you have cracked brand awareness. No matter how well sales might be doing, you can never assume you have done enough to guarantee future success. Invest the maximum you can afford into marketing to stimulate continuous growth or risk stalling the business.
2. Efficient Sales Process
Focus on simplifying and streamlining the decision-making process for your buyers. This requires creating clear, concise messaging and sales materials that address the concerns of different stakeholders, offering product demos, case studies and Proof of Concept (POC) opportunities. Streamlining the client onboarding process can also help reduce the perceived risk of adoption. Prospects need assurance that your solution gets them working and creating value quickly or at least have a detailed plan for how and when that will happen.
3. Engage Early Adopters
Securing several key early adopters can be instrumental in building credibility and overcoming market resistance, especially if those clients are well-known players in the industry. Early customers can serve as powerful references, providing testimonials and case studies that demonstrate your product’s value to similar organisations. Offer incentives by inviting early adopters to join a beta program, providing benefits such as discounts and customised features. These customers may be willing to collaborate on your solution’s development roadmap.
4. Regulatory Obstacles
It’s important to understand the regulatory landscape of your target market(s). This may involve working with legal experts, seeking certifications or collaborating with industry bodies to ensure compliance. Proactively addressing regulatory concerns helps to show prospects that you have mitigated some of their risk exposure if they decide to work with you. Doing so helps to build trust and gives sales prospects the confidence they need to make an informed buying decision. Be realistic about what accreditations you need, can afford and when to secure them, but accept the fact that some sales opportunities may not be open to you until you have the appropriate certifications.
5. Strategic Partnerships
Forming partnerships with established companies can provide you with the credibility and market access to overcome some market resistance issues. These alliances can take the form of reseller agreements, joint ventures or technology integrations. Partnering with established vendors can also provide valuable insights into customer needs and market dynamics. By associating your business with a more established brand, it’s possible to increase awareness about your solution.
6. Innovation
Innovation is also important and one of the most effective opportunities for you to achieve differentiated value. In markets that are saturated or fragmented, differentiation will be the key factor that pulls everything else together to make a powerful story: from your messaging to your sales process and through to every stage of the customer lifecycle. Innovation comes in many forms, including a superior technical solution or service, an excellent customer experience, accessible pricing models, flexible engagement options, business value creation and cost savings.
7. Business Model and Pricing
Offering innovative engagement options and accessible pricing can make the difference in overcoming price sensitivity. Understanding the customer and what their preferences might be is important. For example, do prospects in the target market prefer subscription-based pricing, capital expenditure, tiered pricing plans, usage-based pricing or something new? Providing a free version or a time-limited trial can also help reduce friction and mitigate some of the perceived risks customers may have. knowing your market and identifying how customers like to engage commercially for solutions like yours, will make it easier for customers to do business with you. Do not restrict them to pricing options they don’t understand or that don’t suit their commercial preferences and needs.
8. Market Focus
Doing your own market research and analysis by continuously gathering and documenting information is important. Feedback from prospects and customers is essential in helping you to refine your messaging, tactics and product development. This helps you adjust go-to-market plans appropriately, so they are more effective. There is no substitute for speaking to customers on a regular basis. As a founder or marketer of a tech startup, if you do not regularly engage with your clients and prospects to understand their opinions, perceptions and requirements, then you cannot be effective. It’s all well and good being agile and responsive in theory, but if you are not market focused then it will be difficult to make the relevant adjustments to product and strategy that really matter.
9. Invest in the Go-to-Market Functions
Startups that don’t invest in marketing and sales will struggle to survive, never mind scale. If you fail to invest in the two most important functions of your startup, then you are either creating a lifestyle business or a soon-to-be-failed startup, and we don’t need any more of those. The cherry on the cake will be the money you wasted on company-branded hoodies. Despite limited resources, you must allocate adequate budgets to the functions that will grow your business.
This investment is essential for building brand awareness, demand generation and converting prospects into customers. A recommended guideline is to allocate between 10 and 20% of your annual revenues to marketing, depending on the company’s stage of growth and market conditions. For early startups with little or no revenue, you will have to invest substantially more than that. If you cannot do this, then you either need external investment or to limit your growth expectations. A winning mindset must be supported by creating the conditions for success if your go-to-market team is to be effective.
10. Brand Identity
Your investment in marketing is what will fuel and build your brand, creating market awareness and sales momentum. Without a brand of any significance or recognition, a startup’s journey is likely to be a short one. The most successful vendors in the IT industry bet big on marketing and sales. They have a sharp focus on market dynamics, such as technology trends and competitors. However, they also spend time gaining an intimate knowledge of the customer. Clear and consistent brand messaging that resonates with your customers creates the emotional connection you need. Your investment in marketing is not a cost but an investment that will provide a return in the form of revenues, which is the lifeblood of any business.
Survive and Thrive
Given your startup has a relevant solution for your target market, it will be market resistance and how you handle these factors that will determine success. None of these challenges presents an insurmountable barrier, but all require your thoughtful attention to overcome them. Having strong leadership in all business functions will accelerate your progress. Educating the market, simplifying the messaging and sales process, building credibility and investing in marketing are all critical steps in overcoming resistance and winning new customers. The path of B2B tech startups will always be challenging, but with persistence and a well-developed strategy, you can break through market barriers to survive and maybe even thrive.
You may want to read: “Top 4 Ways Tech Startups Innovate.”
