So you finally hit upon that great startup idea which you’re passionate about, which you’re sure you can pull off, and which will eventually let you rake in the millions by scaling for customer growth! You’re on, right?
Not so fast. One of the most common mistakes budding entrepreneurs make is to think of their “idea” as a “company.” They have figured out the solution to the T, but guess what, there’s no problem in the first place! A much-publicized CB Insights study confirmed what experienced businesspeople knew all along – a lack of market need is by far the top reason startups fail.
How then, do you escape the prison of your “next big idea” and make sure your venture doesn’t bite the dust, taking your aspirations along with it? Simple (but not easy): stop building a solution and start solving a problem.
The key to doing this is identifying a critical need in the market around you and creating a product or service that satisfies that need. In marketing parlance, this is called achieving product/market fit.
“When you reach product/market fit you essentially have built something people want. You naturally get traction, and things unfold very quickly. Reaching product/market fit is perhaps the most important thing for a startup.”
– Joel Gascoigne, Founder of Buffer
Here’s my humble attempt to break down three different types of problems that make customers’ lives difficult, and walk you through examples from brands that have successfully soothed their customers’ pain points in each case.
Problems That Affect Pretty Much Everyone
You know about this one. The flu. Crowded trains. Traffic jams. Corrupt politicians. You’re probably struggling with more than one of these problems as you read this. Yes, there are a lot of huge and powerful organizations trying to overcome them. No, they haven’t tasted success yet.
This means there’s a perennial opportunity to solve for practically unlimited markets. Which isn’t to say it’s easy. However, resourceful startups have demonstrably proved time and again that there are few problems that can withstand human motivation to overcome pain.
It often happens that when you aim to solve a particular problem that affects a significant chunk of humanity, you end up solving a whole bunch of related and similar problems. These are called meta problems. And there’s practically no limit to the number of people your solution might possibly impact.
Airbnb is one of the best examples of this. Cities known for popular events or tourist attractions have a perpetual shortage of hotels and places to stay. Airbnb tackled this problem by enabling residents to rent out their rooms and homes to swarms of people descending on their town, solving for both the insider and the outsider.
A single event helped them shoot into the limelight. In 2008, Obama was supposed to speak at the Pepsi Center in Denver, which had a capacity of about 18,000 seats. Owing to Obama’s rising popularity, the venue was changed at short notice to the 80,000-seat Invesco Field, sparking a potential lodging nightmare for the city. But Airbnb was fully prepared. They ran a multi-channel marketing campaign that brought both consumers (attendees) and producers (property owners) on board at the right time, and managed to avert the crisis as well as gain a lot of media attention in the process.
Airbnb never looked back and has 4 million plus lodgings listed across 65,000 cities today.
Problems Arising from Solutions
Niche markets and unique brands frequently spawn cult followings of their own. You need not look any further than Apple. Steve Jobs created a whole market where there was none not once but multiple times – with the Mac, iPod, iPhone and iPad. These were not so much solutions to problems that people never realized they had (something which we’ll discuss in the next section) but unique products that gave rise to indulgences (pleasure vs. pain) that they never realized they could have!
No surprise then, that there’s a whole ecosystem that caters to exclusive and loyal users of Apple products, ranging from app developers to case manufacturers.
However, in many cases (especially that of Apple), with pleasure and exclusivity comes a subtle lock that binds you to the brand or manufacturer. This leads to resentment among users who don’t want to lose the convenience on offer, but at the same time have no intention of being tied to a limited set of functionalities.
This kind of situation is what begets a “solution to a solution.” Case in point, one of the first things a lot of iPhone buyers look for is ways to bypass iCloud activation. Apple, of course, isn’t keen on users doing this, but that doesn’t prevent them from googling the solution:
This is where tech blogs, another ubiquitous part of the Apple ecosystem (where experts in the domain vie to disclose hacks and review features before anyone else), come in. iGeeksBlog is one such blog (closer to home) that attempts to retain mindshare among Apple power users and early adopters by revealing iPhone and iPad hacks with uncanny resourcefulness and accuracy:
This is a fine example of a customer-first mentality. “We focus on readers’ interests and pain points over product features or the Apple brand. You need to be bold enough to put your audience’s interest over your own if you want to serve them well,” says Jignesh Padhiyar, the Co-Founder and Editor-in-Chief of iGeekBlogs.
As close to having your cake and eating it as it gets, eh?
Problems Customers Can’t Quite Put their Finger On
Finally, there are those problems that customers don’t know can be solved, or even exist. They are vaguely aware of something wrong with a product – a nagging feeling that’s been at the back of their minds for a long time, which comes only while it’s being used, and disappears shortly afterwards. You know what I mean?
The classic example here comes from the men’s shaving industry. Shaving razors and gel were overpriced and typically cost up to US$20 a month when Dollar Shave Club entered the US market in 2012. Gillette was the undisputed leader with a 72 per cent market share. So how did David take on Goliath?
One, Dollar Shave Club made customers aware of the futility of technology in razors (that was garishly advertised at the time), emphasizing that features like multi-blade were pointless and served only to artificially inflate the price of a basic commodity.
Two, they priced a month’s worth of razors at US$1.
Three, they sold their razors via a simplistic online subscription model. You no longer had to remember to buy razors; you simply got them in the mail.
Three problems that men barely knew they faced day just about every morning solved in a flash!
And how did they reach their potential audience? Via a viral YouTube video that has garnered 25 million views to date. Compare that with the roughly 40 million views on Gillette’s 173 videos put together:
No wonder Dollar Shave Club went on to become the number one online razor company. They were acquired by Unilever for $1 billion in 2016.
Over to You
By now, I hope you’ve abandoned the idea of building yet another chatbot, blockchain app, or whatever is gripping the fancy of your fellow Hacker News and Product Hunt addicts these days. Product/market fit is the single most important factor that will guarantee the success and the sustainability of your startup. Here are some simple takeaways that will stand you in good stead for any venture:
- Identify a problem (and understand the audience that has it).
- Collect feedback and validate the problem.
- Attack one aspect of the problem (over multiple facets) and aim to build the perfect product/market fit for it.
- Scale as and when possible.
Image Credit: gajus / 123RF Stock Photo
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