Will AI make finding the right market for a product easier? I’m taking the test.
I work with a large number of startups to achieve product-market fit. For many founders, this is the most uncomfortable phase, full of uncertainty and setbacks. Of course, my startups use AI for many steps, but can you simplify the entire process again?
AI offers startups valuable tools and insights to understand their target market, refine their product, and create a winning value proposition. I have now tested the entire process up to the test of a value proposition and want to make life easier for you with this article.
So here’s how startups can utilize AI to drive toward product-market fit:
I want to target early-stage startups and want to know from Bing how many startups are being created annually in Europe. Surprisingly, Bing didn’t know and only knew about VC investment. Although, the fact that “Europe is the fastest growing region for VC investment” is at least promising.
ChatGPT4 with web access helped me further and gave me additional information:
“…challenges persist, especially for new startups. According to Atomico, less than 1% of venture capital invested in the first nine months of 2021 went to companies that were launched in that year. This suggests that while the number of startups may be high, newly established companies might struggle to secure the funding necessary to grow and succeed.”
In market research, the weaknesses of AI become apparent — publicly not easily accessible and up-to-date data are hard to come by. And this is a pity; In my experience, most startups rely on data without any value, and it’s basically gut feeling covered with a fig leaf. So calculating market sizes still requires a bit of craftsmanship.
Based on extended research, I created my persona with ChatGPT by using this prompt:
My market is ((describe market)); create a persona representing this market with realistic attributes such as age, education, likes and dislikes, hobbies, tools she uses, how she communicates with my business, social networks she belongs to, and describe briefly how she is and what her most significant challenges are.
Now use the persona description to create a suitable image using an AI image creator such Getimg.ai.
My persona is Laura, an ambitious and determined individual who thrives on challenges. She is highly motivated to bring her tech startup to success and positively impact the market.
I want to understand her problems first to find a suitable solution for Laura. I already have some problem hypotheses, but I want to ensure I cover more and get inspired. Although the generated problems are mostly the ones I was thinking of, ChatGPT confirmed that there are a couple of big problems to solve, such as “I believe that Laura might struggle with identifying the right target audience for her product.”
I first seek existing research data with Bing since ChatGPT3 does not provide the latest data. Bing AI or ChatGPT4 with web access can provide up-to-date information, hence overcoming one of the main ChatGPT3’s limitations.
I ask Bing AI: “Is there any research that shows that startup founders struggle with finding the right market.”
Yes, research shows that startup founders struggle with finding the right market. According to an article on Forbes, the first and arguably most important challenge a startup founder faces is the discovery of a real market need. Building something nobody cares about is arguably the biggest mistake a startup can make. An examination of startup failures revealed two common mistakes by founders: failing to engage the right stakeholders and rushing into an opportunity without testing the waters first.
As part of my market assessment process, I wanted to ensure my hypotheses’ validity, so I conducted 5–10 interviews with individuals who fit my target persona. I recorded video interviews with each participant to capture all the valuable insights.
To simplify the task of transcribing and organizing the data from these audio interviews, I turned to the power of AI. I used a tool called Whisper, developed by OpenAI, which accurately transcribes audio into text. What’s impressive about Whisper is its ability to transcribe the audio into multiple languages, making the content more accessible and widening its reach.
Once I had the transcriptions, I used ChatGPT to analyze the size of the problem. First, I store the transcript in a new chat and then start asking my questions based on the problem hypothesis.
“How many times did my interviewee refer to the problem hypothesis “struggle with finding the right market? On a scale from 1–10, how big is the problem for my interviewee?”
Now, I want to create some solution hypotheses to this problem.
Among the problem hypotheses I validated was the belief that Laura might struggle with identifying the right target audience for her product.
Now, I want to create some solution hypotheses to this problem.
Again, I use ChatGPT as my virtual co-founder to get additional ideas. By the way: You can download all the prompts here. The answers are pretty much what I’m doing today, such as Data-Driven Consultancy, Workshops, Online Courses, and Mentorship Program. Although it seems evident in that case, it might help create more hidden solutions to challenging problems. I made my choice and want to test this idea:
Mentorship Program: Establish a mentorship program where experienced entrepreneurs guide startup founders through the process of identifying and understanding their target audience. This could involve regular check-ins, brainstorming sessions, and practical exercises to help Laura and others like her refine their audience identification approach.
The value proposition is one of the most critical elements in building a successful startup and product. It’s often the first thing potential customers see or hear about your offering, even before you have a product. If your value proposfition doesn’t resonate with your target audience, they’re unlikely to become customers.
To get there, I want to understand the most attractive benefits I can provide my buyer persona to stand out from the competition.
Based on my selection “Mentorship Program,” ChatGPT defined the following benefits:
- Guidance and Support
- Personalized Attention
- Network Expansion
- Skill Development
- Accountability
- Risk Mitigation
- Building Confidence
Together we use the Kano Model to assess those benefits:
Now, help me assess those benefits and pick the ones where I can stand out using the Kano model
The ones that stand out the most are:
Network Expansion: The opportunity to expand her network is a potential bonus but not necessarily an expected part of a mentorship program.
Risk Mitigation: While this is a great bonus and could help Laura avoid common pitfalls, it is not an expected outcome, making it an attractive quality.
While Guidance and Support and Personalized Attention are “Must-Be” qualities — benefits I need to deliver.
“We help startup founders like Laura to mitigate potential business risks and expand their professional networks by providing a personalized mentorship program enriched with unique networking opportunities and experienced guidance to avoid common pitfalls.”
That makes sense, right? But now very catchy, yet. So I want ChatCPT to create a compelling tagline plus three USPs based on this value proposition.
Tagline: “Empowering Startups: Navigate, Network, and Negate Risks.”
USP 1: “Navigate Your Path: Personalized guidance from experienced entrepreneurs to help you steer your startup confidently, focusing on areas that matter most to you.”
USP 2: “Network Expansion: Unique opportunities to connect with a wide range of industry professionals, helping you create valuable relationships and open up new possibilities for your business.”
USP 3: “Negate Risks: Learn from those who’ve been there. Our mentors guide you to foresee and mitigate potential risks, saving your startup from common pitfalls and helping you make informed decisions.”
In the quest to gauge market demand, my Value Proposition served as a stellar compass to construct an engaging landing page with Mixo. The journey was anything but arduous — with ChatGPT by my side, I managed to amplify the visual appeal and inject more punch into the copy within a mere hour.
Thanks to ChatGPT’s creative prowess, my tagline and unique selling propositions now boast a polished sheen, prompting me to integrate these improvements into my landing page.
Geared up to ignite a test and drive traffic to my landing page, I crafted riveting ads with AdCreative. I ensured that the chosen promotional channels harmonize perfectly with my persona’s predilections, setting the stage for a highly targeted campaign.
My sights are set on two ambitious yet attainable goals: soaring beyond a 10% conversion rate, aiming for the 20% mark, and rallying a robust subscriber base of 200 during the testing period. Full steam ahead!
Leveraging AI tools accelerates validating an idea, particularly when you’re a solopreneur craving a virtual co-founder. However, it’s crucial to remember that the essence of product building lies in its human element — your audience. Engaging in conversation with them is not merely a task but a necessity. This integral part of idea testing is labor-intensive and, by its very nature, remains a craft that requires diligence and patience. Even in a world that’s increasingly automated, the art of understanding human needs and preferences remains a hands-on endeavor.