Launching a product and gaining customer acceptance is a challenging journey. The thrill of securing our first few customers is a moment we all savour. However, being aware of the 'Reciprocation Trap 'is crucial, a deceptive pitfall that often follows such victories. I, too, have fallen into it in the past.
Our product team's evangelization efforts paid off, and we acquired a few customers soon after the product's release. We felt indebted to the customers, as they allowed us to implement the new product. However, we made the mistake of dedicating most of our time and resources to ensuring these customers' successful implementation, even at the cost of meeting their unreasonable demands. With a limited resource, we struggled to balance customer demands with roadmap execution and customer acquisition. This excessive focus on a few initial customers while neglecting product scaling is what I refer to as the "Reciprocation Trap." The term is derived from the theory of reciprocity, which explains how people tend to reciprocate kind actions and punish unkind ones. We responded to our initial customers' confidence, focusing on their needs without considering other aspects of the business.
Since then, I have learned to avoid this trap and have become disciplined about targeting specific market segments, building repeatable solutions for prospects in those segments, and differentiating ourselves from competitors. A well-defined market and a repeatable solution enable us to achieve economies of scale, allowing us to support more customers without overly focusing on a select few. When done correctly, increasing customer acquisitions leads to higher product revenue and reduced onboarding costs, resulting in profitable growth that benefits even our initial customers.
Scaling the product increases revenue and fosters a more robust and sustainable business model. For instance, Wayfair reduced its 200 distinct websites, selling different products to a shared marketplace, achieving economies of scale and enhancing cross-selling opportunities. Similarly, consider reading how Candy Crush by King Entertainment scaled its gaming business.
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