Every startup makes a decision early in its life, conscious or not, to be either product-driven or sales-driven. Product-driven organizations look to solve a problem, which requires investigating and even anticipating potential market needs. A sales-driven organization's primary goal is to generate a lot of revenue in a short amount of time. They tend to be reactive to marketplace demand, iterating and selling more of what sticks.
The latter sounds appealing at first, doesn't it? Who doesn't want fast growth and massive revenue? But it's the product-driven approach that sets the table for building a high-impact, enduring company.
My company was conceived while I was pursuing my Master of Business Administration at Stanford's Graduate School of Business. A cardinal mantra you'll hear from Stanford's brilliant entrepreneurial minds is this: Find a product-market fit. This means not simply building a great product or service, but building into a need that addresses a market gap. Many companies struggle with this early on, as this approach lives on a foundation of fact mixed with smart intuition. There are truly amazing products out there that failed when the company later discovered the market wasn't there.
A product-driven company seeks genuine problems to solve. A sales-driven one sells whatever they are given to whoever will buy it — regardless of whether the customer's need is met. This approach creates challenges in several areas, chief among them being customer satisfaction and retention.
Create a must-have solution.
Product-driven organizations start by looking at the market. What are the pain points? What needs are going unmet? Is the market growing despite lackluster options? These companies speak with customers to better understand what this need might be and how acute it really is.
One of my professors at Stanford, a renowned venture capitalist and entrepreneur, would repeatedly use the following analogy: Are you selling a vitamin or an aspirin? Are you offering a "nice-to-have" or a "must-have" solution? Is there a real, high-priority problem worth solving? Sell aspirin, not vitamins.
Sales-driven organizations often hire too many salespeople before they have zeroed in on the market need. They sell (and maybe a lot at first), but leave in their wake a leaky bucket of unhappy customers. They likely have a wide range of clients that look very different yet are being sold the same thing. This is exacerbated when salespeople start providing product development teams with anything-goes input. Inevitably, over time, the company's products become bloated and solve no one's problems well. Departing customers and declining sales inevitably follow.
Product-driven organizations, on the other hand, rely on word-of-mouth, customer references and reviews, rather than sheer brute sales force and growth hacks, to accelerate growth. This is a compounding effect that, when coupled with strong retention thanks to happy customers, yields a super-linear growth curve.
Build a product-driven sales team.
I'm not saying companies shouldn't have a robust sales team. A high-performing sales team is critical to the success of nearly all B2B companies. However, the sales team is there to understand customers' pain points and help them solve it with your product. They're problem-solvers and solution architects.
This means that the salespeople you hire need to understand your products as well as your product team. Separating customer success from sales can create this divide. Having your sales team walk in the shoes of your customers throughout your journey together reinforces a good habit of "listening" for problems.
Listen, learn and improve.
Listening to customers enables you to anticipate and better manage the inevitable bumps. It also informs you of the challenges and opportunities that exist around the corner. Being product-driven is, in some ways, also being customer-driven, with elements of inferring how the next smart feature will manifest.
Editor's note: This was reprinted from a Forbes article