Nokia Startups Mistake #6 – Not Being Close to The Customer

This is part of my Nokia Startups Mistakes series. For a backgrounder, please read the introduction.

“It is hard to develop a world-class product in a lab far away from lead customers and key ecosystem players.”

Your success begins from understanding who your customers are, and what are their true needs. To be clear on this, your success does not begin from your lab.

In many cases, your lead customers, the ecosystem and its dominant players are not in your home country but on the other side of the ocean. The long distance makes it a challenge to understand the evolving customer requirements, intricate details of the ecosystem and its power structure, and what your competitors are up to.

It is very important to be visionary but it is downright stupid not to try your best to understand what the customer needs.

Why all locations are not equal?

In Finland, with the near end of existence of Nokia and its ecosystem, we are not particularly an epicenter of anything beyond the mobile gaming. The winners are typically born close to dominant ecosystems where all the action and latest knowledge is. Or close to the first few leading customers who are first to take into use a novel or just different approach to their problems due to their innovativeness, or unique external environment circumstances at the time.

Interesting geographies from ecosystem, market size and new tech adoptation point of view include naturally USA, China, and emerging markets in South East Asia and Africa.

How to do customer development from distance?

In some Nokia cases, I have been delighted to see this local customer development element in play from day one. In other cases, the customer development part is handled from Finland via Skype and email, by using a network of local agents, and once and awhile hopping on a plane to have face-to-face meetings with far away customers and business partners.

Outsourced business development or too lean business development from distance is not the way to go if and when your early success depends on closing the first customer out of a handful few whose purchase window is open now. If you want to close deals and accelerate to the product-market fit (or pivot), you better be close to your customers and get used to spending a lot of quality time in planes and hotels away from your family. Yes – time away from your family, until you have some traction and you can start doing things differently.

The Nokia alumni is a vast network that spans the whole world. People who you either know in person or at the minimum share the Nokia experience with. This is a great asset – use it!

To be close to your customers at minimal cost, I suggest the following approach:

  1. Recruit a local business developer, perhaps a Nokia alumni, as part of your founding team or early employee with a strong vested interest to help you understand your customers.
  2. Use external agents only to open doors, never rely on them do drive your sales and customer development.
  3. Don’t use any time drafting lengthy distribution agreements until you have a product/market fit established. And even then rather work with your agents and business partners, close the first joint deal, and formalize the relationship only then.

As the final remark: be lean but, more importantly, understand what the customer needs. 

I hope you will enjoy this series, the thoughts it provokes, and the discussion it triggers. Please do participate to the discussion by sharing your own angle and experiences on this topic

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