Dmitry Mikhalchuk, the founder and CEO-optimizer of the Ukrainian IT project GrainTrack, whose team has developed a highly specialized program for automating the business processes of grain traders, shared the secrets of how to bring a new product to the market and gain a foothold on it with a minimum initial budget.

Choosing the right niche

When starting a new project, the main thing is to choose the right niche for a startup, on which you will spend time and resources. If the choice is successful, the advice in this article may not even be needed, since the project will very quickly have investors. But if for some reason this does not happen or the investments are not as significant as necessary, the project will have a chance to break through on its own. At the same time, you need to clearly analyze the value of your further decision, whether the target audience will be ready to pay for it.

I made the decision to create my own project, having thoroughly studied the field of future activity - grain trading. Before that, I worked in this business as a manager in a large company and learned from personal experience that there was a gap in the niche with quality management software.

Today, the work of trading companies, whether it be wholesale or retail, is largely automated - the registration of applications is automatic, a single base of customers and orders is maintained, planning and calculations are made, the arrival / departure of goods in the warehouse is taken into account.

In grain trading, until recently, all processes were massively accompanied in Excel tables. Standard ERP and CRM programs are not suitable here due to the nature of the business associated with price volatility in the market, and as a result - a completely different approach to the purchase and sale of products, a complex contract execution process and increased requirements for assessing the trading position and financial flows.

When we started, there was no special solution in this niche, there were only isolated individual attempts to implement something similar for the customer.

The solvency of the target audience is also important for the success of the project. For example, we took into account that grain trading has been dynamically developing in Ukraine over the past few decades, the volumes of grain production and exports are growing from year to year, and accordingly, the financial capabilities of the business are increasing.

Margin of safety

In most cases, at first, startups can only rely on themselves, so it's good for founders to have some margin of safety for basic development that can be presented to the market.

The margin of safety does not mean necessarily money. Our project was able to "start" due to the fact that I myself had programming skills and started working on the product on my own. Later, I got a partner - a like-minded person who also began to contribute to the development, and later to the promotion of the resource, all this was done, of course, free of charge outside of school hours.

The second important point is that we had minimal development expertise based on our own experience. This is a very important component, because without such expertise, you can “draw a problem in your head and come up with a solution,” which in fact does not exist.

It is not necessary to rely on your experience, it will be nice if there is a person who is ready to become your insider.

In an extreme case, you will have to deeply study your niche based on specialized literature and publications.

In general, the idea here is to be able to release a basic product that will fall into the pains of the target audience and can satisfy them, and you will not lose interest in development and promotion before the first customers appear, which may not happen as quickly as the founders of the project would like.

Define your audience correctly

At first, we made mistakes in defining the target audience, believing that our client base is the entire grain trader market, from small to large. Only after some time did we realize that this was not the case. Small companies with two or three employees were interested in the product, but later many dropped out.

Based on the results of the presentations that we gave them, and testing the free demo version of the program, it became clear that it was too early to use the program, since their business process is not yet so complicated and everything you need can be done in Excel spreadsheets.

On the other hand, interest from larger companies began to transform into users a year after the first release of the basic version.

It took time and effort to generate illiquid leads. However, we drew the right conclusions and changed our marketing settings to target and reach companies that might be interested in the program in the first place.

Get ready for a long promotion game

You can wait a long time for the first client. At the initial stage, startups often lack funds even for development, let alone marketing. Therefore, you need to bet on free PR.

We have used all available free communication channels. We started a blog on our website, set up SMM in social networks, started making mass email-mailings, writing expert materials in the media, speaking at specialized conferences.

For niche IT products, it is extremely important to choose the sites where the target audience is located - these are highly specialized resources and communities.

In combination with word of mouth, which started working very quickly, everything gave a good result.

And it is not necessary to hire a PR agency, the basics of this profession can be learned from the Internet, where there is a large amount of educational content on the topic.

You don't need to be fooled by offers of paid advertising articles about your business. They will earn money for you, but this will not give the expected result. We also thought that a paid article with advertisements could help you make a name for yourself. Having raised some money, we ordered such material in one media outlet, but this did not change anything much. PR for a start-up startup can only bring results with systematic work. You simply won't have enough money for paid materials.

Instead, systematic work with free tools will give good indexing to your site and make your company recognizable.

Help from accelerators

At the beginning of the journey, we got our bearings and applied for participation in the startup development program, which was organized by the MHP accelerator in 2018.

We did not win the competition, but thanks to reaching the final (13 out of 184 participants made it to the final, among which was Grain Track), we were able to appear in the press, including national channels, this was later converted into attracted clients.

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In addition to the specialized agroaccelerator, in Ukraine in the past few years, many accelerators, incubators and hubs have been opened for the development of the IT industry, for example, UNIT.City, SECTOR X, 1991 OPEN DATA INCUBATOR and others, which help promising projects to get on their feet. Having a good idea for a startup, you should not sit still, you should try to become a participant in the programs of these organizations.

Correct work with clients

Inept work with sales, especially in niche products, can put all the lead generation work down the drain.

Like many product startups, we started selling our development through a presentation and a free demo. This is a rather narrow place. To sell a product, you shouldn't give demo access for a long time.

We initially opened access for two weeks, it ended up with the fact that potential customers did not go into the application. What is given for free and for a long time is valued low - as a result, most of the leads never made it to the test.

We have reduced this period to three days. At the same time, at the end of the trial period, we did not hesitate to call and ask a direct question whether we liked the system and whether there is a desire to test it further. This allowed us not to scatter our efforts.

However, if the answer is negative, do not rush to move such a lead to the Lost folder. If the presentation was carried out correctly and the main thing was told about the program, it is possible that this lead will come back to you later.

In our practice, this has happened more than once, the introduction of a product like ours is a serious business decision that entails the restructuring of many internal processes, sometimes companies need to think and mature.

Also, take the time to create videos and text instructions so that customers who will get acquainted with your product really understand it, and not just open and close it.

Make a universal product for different markets

It makes no sense to limit yourself to a specific market - this narrows your opportunities for customer base development and scaling.

There is one important point in the niche in which GrainTrack operates - today we are not the only provider of such services on the local market. Other local developers have appeared, but they make programs based on the accounting system popular in the CIS, which gives them certain advantages for domestic consumers, but makes it impossible to export services to the Western market.

We made our program from scratch. After analyzing the situation in Western Europe and the USA, we saw that local developers offer services similar to ours to grain traders, however, due to more loyal prices, we gradually began to bite off our share of this market. Today, in our client portfolio, in addition to the cases of grain traders from the CIS, there are cases of large grain traders from Canada, Switzerland, Great Britain, Egypt.

Be flexible

For a startup, adapting to the situation is vital. Large established companies are clumsy, react poorly to external changes, and bureaucracy begins to corrode them from within. In this situation, the ability to flexibly respond to changes and requests can become a significant advantage for a young IT startup and an additional add-on to a quality product.

Starting to develop our product, we saw it as a program for the operational management of grain trade. However, in the future, they began to receive applications from representatives of other businesses. At first, we signed a contract with a gas supplier - to be able to record operations with gas sales, we had to make certain improvements, and this is how our by-product GasTrack appeared.

Later we realized that the functionality of our development is not limited to these two niches, but is suitable for the business of trading any other raw materials, it took just a few touches to do this. This is how we got our first foreign client engaged in the wholesale trade of coffee - a large Asian company. We are also negotiating with a large Western company that trades in metals, and a number of others.

Summing up, I would like to advise people who are already developing their startups in narrow niches of the agro-sphere or are just thinking about it, to approach their projects carefully.

Sometimes, in order for a project to take off, it is not necessary to make a large investment in the beginning. It is quite logical to approach the choice of a field of activity, not inventing a problem, but proposing a solution to an existing one. Ideally, you need to know the problem personally or have acquaintances who will give you the necessary insights, find two or three like-minded people from the field of development and marketing, and also correctly distribute your efforts to promote the product.

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