Each of these sections could be complete articles (or books) on their own. We’ll work with Startups Magazine to bring more detail to these sections in future articles.

Clearly differentiated product

At the end of the day, having a product that is clearly differentiated and unique in key ways is the most important consideration you’ll make as a company. Your product should have a clear value proposition – it solves this pain point for our customers and that pain point cost our customers $X or Y in time. And as a result, you’ve found that customers are willing pay enough for your product that offers you and channel partners viable profits (more discussed in pricing). The size of your target audience should be material, in that enough people with this pain point would benefit from your product to make a meaningful business for you and perspective channel partners. We recommend that products should be defensible and not easy to copy or ‘knock off’. Having a patent can be important for long term success and investment viability. Regularly, we see companies that are effective in taking existing feature sets and applying them to new use cases and being successful.

If you plan to lead with price differentiation, our experience is that price is usually only a short-term differentiator. Once you start gaining visible market share with your product, larger, more established companies who already have economies of scale can easily lower price and negate your advantage. Now, if you have a new manufacturing process or materials that provide a sustainable pricing advantage, that can be a differentiator. But even here, Asian manufacturing adapts quickly and can usually copy good ideas within six months.

At CES 2025, I saw a number of exhibitors who were showcasing their new ChatGPT, AI-based glasses. For the most part, these products had not yet launched (though were available on Kickstarter). They all had built in cameras for photo and video recording, microphones for asking ChatGPT questions and speakers for hearing the answers or listening to music. Except for some styling variations, all of these products functioned the same and offered the same benefits to the same user group. While I believe this is an exciting new product category and use of AI, most of these products will not be successful in North America unless they put a lot of marketing dollars behind their brands and products, because they didn’t clearly differentiate themselves or deliver expressly on specific use cases.

The US and Canadian markets are open markets, meaning its pretty easy to launch a new product here. So, if your product doesn’t meet a specific unmet need of substance or new use case, I would consider saving your funds and holding back your product until it does.

Pathways to reach customers

In today’s market there are numerous routes to reach customers with your brand and products. Each path to the customer, be it a business or commercial customer or an end consumer, comes with different opportunities and challenges and financial considerations. We believe it best to understand the customer’s journey and ultimately the most likely purchase considerations for products like yours before selecting an approach. For example, if I were coming to market with a mobility product for seniors, I would want to first understand is the senior purchasing the product or will a family member be purchasing the product for the senior. And are there individuals, like healthcare workers or trusted advisors, that recommend these types of products for purchase? If my category of product was a highly recommended one, it may be best to influence those recommenders and then look to transact over my company website or another form of direct response. If these types of products are often purchased by caregivers at senior mobility retailers, I would look to get my products assorted with these stores.

Here are the primary pathways to consider to reach your customers. Of course, more than one route can and is often selected, especially when you find that customers want to connect in difference ways over their journey or you are serving multiple customer segments: Company Direct (direct sales, direct response, company website), Commercial Resellers and Retailers and their websites (‘The Channel’), Amazon and Marketplaces, OEM/Licensing/Private Label. A note before we turn our attention to pricing: Channel partners, resellers and retailers don’t create demand for your product. They fill the demand that you or competing brands have created in the market. Don’t expect to get new sales just because you are now ‘available’ through a reseller or retailer. If the reseller has an outbound sales component and you have provided sufficient motivation (profit, training, marketing collateral) then it’s safe to assume that this partner will help generate new sales for your product.

Pricing that aligns to the value prop

As discussed earlier, customers need to see clear value in your product. Their value perceptions are in part determined by the benefits your product offers and in part by the value similar or comparable products offer. Additionally, customers may also consider what it would cost to solve for their need another way and set that valuation on your solution. So set the right selling price (or MSRP – Manufacturer’s Suggested Retail Price) up front, then work backwards. Keep in mind that you don’t include sales tax or VAT when setting your selling price in the US or Canada. That is calculated and paid by the customer.

Working backwards means that you have to calculate your margin and the costs of the desired path to reach the customer from the MSRP you set. If you work up to your MSRP by determining landed cost and desired gross margin/profit, you may be leaving money on the table, price yourself out of the market or not incorporate the margin needs of your channel partners. Some quick rules of thumb this: if you have a commercial tech product where you believe business resellers would give you the broadest reach of your product, anticipate that they will need 30% margins. If your channel strategy incorporates distributors, add in another 10-12%, which builds in the channel marketing they will often require. For a consumer tech product, the retail channel is usually more expensive – 35-40% margins for etailers and big-box retailers selling tech +12-15% for distribution margins. We know that European distributors often take 20+% margins, but they usually add more value than a US distributor and are not as efficient. If your value proposition suggests a specific MSRP and channel partners give the best chance of success, but your landed cost + desired company gross margin doesn’t support, we suggest figuring out how to cost reduce your product or make some ‘forward pricing’ decisions, whereby you calculate pricing and margins based on higher volumes than you may see out of the gate.

Clear customer segmentation

As discussed earlier, the better you know your customer and the journey they will go through to find and purchase your product, the more you’ll be able to customise your product, the product messaging, the best purchase path and ultimately the price you set, which will ultimately result in greater success for your product and your company.

The most common attributes you should know about your customers would include gender, age, socioeconomic status and other purchase interests. If you have access to location information (or metro vs. rural at a minimum), hobbies and company size (business products) this would also be very useful in your positioning.  

There is never a single set of attributes that will make up your potential audience. So, group or segment individuals in specific buckets. Then look to customise your product offering, its messaging, pricing and your path to market based on these differences. Again, we call this customer segmentation.

We have been working with a great GPS product, that could be used in multiple use cases – asset tracking, pet tracking, seniors and individuals with autism, etc. Some of our early recommendations to the company were to create individual products by modifying the functionality to best meet the needs of each use case, if possible, add in accessories that better complete the solution, get super crisp on the messaging for each use case/audience and then choose a path that was best suited to reach each segment. Early results show that this change of strategy will benefit the company’s unit sales and average selling price greatly (as they are able to charge more for a complete and specific solution).  

The importance of marketing

Companies that throw their product out in the market and then sit back and wait for sales will usually die a quick death. The old adage “build a better mousetrap and the world will beat a path to your door” has never been true. We have been involved in countless products that were extremely innovative, greatly benefited the target audience and were priced right, but never got off the ground because product awareness and brand affinity was almost non-existent.

Generating product awareness and brand affinity becomes even more important when the primary sales channel is the company’s website or 3rd party marketplaces. First, customers aren’t coming to your website or looking for your product on a marketplace if they don’t know it exists, even if you have great SEO. Second, if they do find your product will your product presentation give them the confidence to purchase your product without any prior product or brand knowledge or experience? Brick and Mortar retailers would provide the customer more purchase confidence (a benefit of this channel/path), as customers assume the retailer has vetted the company and its products. This holds true to a lesser extent for their online assortment. But retailers will also ask about your marketing efforts as part of their vetting process.

So, allocate funds or a portion of your budget upfront to marketing and ensure you’ve got smart people or a great agency building your brand and creating demand.

Financial support

Financial solvency is the lifeblood of all companies. Without it, they die. And unfortunately, most startups die from lack of funding before their product has had a chance to truly get off the ground. It’s expensive to enter the US and Canadian markets, unless you just want to throw your product up on Amazon. Just the shipping cost alone to send your product to your customer across one of the countries costs more than shipping across Europe. But use a 3rd Party Logistic (3PL) firm to store and ship your products and leverage their freight rates with the carriers.

Kickstarter or Indiegogo are great to help finalise your product and get production off the ground, but on their own they will not support your ongoing operations. Plan on one year without meaningful sales to run operations, but during that year you’ll likely have fund multiple production runs (and pay up front).

Thankfully, investment options continue to increase for startups – seed money, incubators, crowd funding platforms like Start Engine, factor agents (pay you for your receivables) and a plethora of investors and funds targeting startups and early-state tech companies. You’ll have a lot more success in securing US investment, however, if you have a US company, but these are pretty easy to start.