The Most Expensive Mistake Founders Make Before Launch

One of the most expensive sentences a founder can say before launching a product is:

“We’ll figure out the positioning once we start generating revenue.”

I spent a couple of hours recently with the CEO of a company preparing to launch a new app. At the end of it, he told me he didn’t think it made sense to invest in pre-launch positioning, audience, messaging and go-to-market strategy until the product was generating revenue.

I disagree pretty fundamentally with that logic on almost every level. In fact think you’ve got the order completely backwards friend.

THE WORK HAPPENS BEFORE THE MARKET

Pre-revenue is precisely when I want to be doing the core strategic work around the identity of the business, the brand, values, market research, ICPs, customer avatars, positioning, messaging, competitive landscape and go-to-market architecture.

Because before you start spending money putting something into the market, I want to understand what the hell we’re actually asking the market to understand.

• Who is this really for?

• What problem are we solving for them?

• Why should they care?

• Where does this sit in their world?

• What are they already using instead?

• What do we believe?

• What do we want to be known for?

• What language will resonate?

• How are we reaching them?

• and... how do all of those pieces actually work together, aka, what is the thread?

A TARGET MARKET ISN’T A STRATEGY

This came up directly in our conversation.

He believes brokers are one of the primary target markets for the app.

Okay. Great...now what?

But how exactly do brokers fit into the model? Are they the customer? The user? A referral source? A distribution partner? What is the value exchange? Why would they participate? What behavior are we asking them to change? How does the product need to work differently because brokers matter?

If you don’t know those things, identifying “brokers” as your target market doesn’t give you a strategy.

You have a demographic and a hope.

And that is exactly what positioning, brand strategy and go-to-market architecture are supposed to help you figure out.

Waiting for revenue before doing this work means spending money executing before you’ve decided exactly what the market should understand and why it should care.

WITH AN APP, THIS MATTERS EVEN MORE

Apps are fluid by nature. Features change. Users behave differently than you expected. One audience may respond while another doesn’t. A use case you thought was secondary might end up becoming the entire fucking business.

That makes the upfront strategy more valuable because now you actually know what you’re testing, which assumptions you’re trying to validate and what the feedback means when it comes back.

You build the strongest strategic hypothesis you can. You put it in front of a deliberately selected beta group. You listen. You watch what people actually do. You gather evidence. You adjust the product, positioning, messaging or audience where necessary, and then you start putting more money behind what you’re learning.

That is very different from throwing spaghetti noodles at the wall and waiting to see what sticks.

THREE VERY EXPENSIVE LESSONS

EVERPIX

Everpix built a photo product people genuinely loved, but its founders later acknowledged that they spent too much time on the product and too little on growth and distribution, started marketing too late and struggled to position themselves against free alternatives from Apple and Google.

Great product. Weak commercial architecture. Expensive lesson.

Source: CB Insights

Three Examples

SHYP

Shyp grew aggressively around consumers before eventually discovering that small businesses were the more profitable customer cohort.

Its founder later called "waiting too long to make that shift" his biggest regret.

They found a better customer after they had already spent heavily scaling the earlier assumption.

Source: Autopsy

HOMEJOY

Homejoy poured money into acquisition and expansion while retention and customer economics were still deeply problematic.

Former employees later described a business spending heavily to acquire customers who simply weren’t sticking around.

Growth exposed the problem, it did not solve it.

Source: WIRED

Different businesses. Different circumstances. Same warning.

Scale amplifies whatever is already there.

If your assumptions are wrong, spending more money simply helps you discover that faster and more expensively.

STRATEGY BEFORE SCALE

I would much rather invest upfront in understanding the identity, customer, market, positioning, message and commercial architecture, then test the shit out of those assumptions with real people before going wide.

You don’t need certainty before launch. You need intentionality.

Because launching something at anyone and everyone and waiting for revenue to explain your own business back to you is a very expensive way to figure out what you could have been learning before launch.

If the investment isn’t a priority right now, that’s your call, but I wouldn’t confuse that with the work being premature, it’s actually the opposite, and this is the stage where bad sequencing gets expensive... those are not the same decision.

There is a difference between deciding you don’t want to spend the money yet and deciding the work doesn’t need to happen yet.

About Deevo

I’m Deevo Tindall, founder of The Brand Storyteller.

I spend an unreasonable amount of time studying why people do what they do, why businesses get tangled up, why smart founders sometimes can’t see the thing sitting directly in front of them, and how identity, behavior, story, strategy and business architecture all quietly conspire with each other.

I’ve been a corporate executive, entrepreneur, photographer, agency owner, advisor, father, traveler, obsessive bougie coffee drinker and enthusiastic student of human weirdness. These days, I help founders and leaders find the thread underneath whatever feels stuck, scattered or harder than it should be, then build from there.

If you like conversations about business, psychology, identity, strategy, story and the occasional existential rabbit hole, come find me on LinkedIn at Deevo Tindall or at thebrandstoryteller.com.

Bring me the knot. I’ll find the thread.