Many startups start from the same place. An idea. An idea that, the founders propose, will create a business that will be extremely valuable.
The danger that an idea can create is immense. Startups are often captured with the novelty of their idea. It might use the latest technology to do something that no-one else is doing, but if it doesn’t solve a specific purpose than it is altogether unlikely to succeed. The number of startups that have perished on the back of a great idea that failed to develop into a customer base is large.
Thus, my number one piece of advice to entrepreneurs is this; If you don’t know your customer, if you can’t easily communicate the problem you’re solving, and if you are not driven enough to pour your heart and soul into something that will very likely be taken away, you are in the wrong place.
Always remember that you are exceedingly likely to fail
Running a startup is an emotional battle. Making decisions based on inadequate information. Juggling technical design, programming, data science, business development, and finance simultaneously creates pressures that few could have imagined beforehand. To go through all that without really knowing your customer is a grave and unnecessary mistake.
Much (all) of this article has been covered before - a hundred times, but I find too much of it comes in an unusable manner using generics or it doesn’t speak in a firm enough tone to garner attention. I am not trying to convince people not to start a company and I am not trying to say I disrespect anyone that has decided to take the leap. Just the opposite - I respect anyone who jumps into entrepreneurship and all the uncertainty, risk, and difficulties it involves. Because of that respect, I want to give people the best chance of succeeding in that endeavor and the best way I can do that is with full-frontal honesty.
You will need to get used to:
- Late sleepness nights.
- Early tired mornings.
- A never-ending cloud of uncertainty.
- Coffee. A lot of coffee.
To go through that without the right goal in mind is a shame. Often, the idea doesn’t really need that much tweaking, just how you’re applying it into a product.
That is why I push entrepreneurs to focus more on the right things. Focus on the plan, on their customer, on their problem. Understand more about your customer than they do about themselves. Spend your time defining what you’re doing, why you’re doing it, and how you are doing it better until you can clearly communicate it to anyone. When you can truly do that, the rest of the journey will be much easier and take much less time.
For many early-stage entrepreneurs, this is a difficult task. The fact that it is so hard, so time-consuming, so stressful, and often lonely, makes it even more important for entrepreneurs to get the right information and the right advice.
So I say to you, future or current entrepreneur, to make this your number one priority. From experience of building a product that no one used, to pivoting purpose while time ticked away. To the understanding of time and money wasted in pursuit of an unclear goal.
Don’t Be a Solution in Search of a Problem
Without a proper understanding of customers, clients, and the problem you are trying to solve, you can throw years of your life and hundreds of thousands of yours (and investors) money chasing a mythical creature that may not exist.
Founders are berated about product-market fit every day. Perhaps due to the constant suggestion of it, many founders ignore this all-important principle and it creates problems in wasted hours, wasted connections, and wasted investments.
Know Your Customer
When I say you should know your customer, I don’t mean that you should talk to a few of them. I mean you should get as close as you can. Get one as an advisor, find potential customers and talk to them about what THEY do, not what you want to do. People in an industry will often find any new technology applied to it as “interesting”.
That does not mean they will buy it.
When you talk to them at the early research stage, be very careful that they are not just being nice. The best way to do that is by asking them about problems that they are having rather than proposing your solution. You should be able to tell me without a doubt that your customers have problem X, and that you can solve it through solution Y. You should be able to handle questions that I can throw at you and know the intricate details of exactly how you are solving the problem.
You know how I can tell when you don’t know your customer? Your explanation of what you do goes something like this.
Our application categorizes news so that it is easier for you to find the right information with less time investment.
Sounds reasonable enough. But I still don’t know what you do.
Why should I buy it? Why should I care about your categorization? Why is it useful? How does it save me time? Can I trust it?
Here is another try.
Our application finds the 1% of new media information that moves stock markets. You can use it to reduce your time spent reading and sorting through information by a factor of 10 and act on the most up to date information available. You will be able to follow breaking news on thousands of companies simulataneously, understand the companies you own better, and do it in a fraction of the time.
Side note - here is a white paper that explains how we do that, and provides thorough evidence that the methodology is sound.
This is much clearer, gives some specifics on the use case. How exactly it is done should be available somewhere (i.e white paper). It pulls on a string of many investors - not enough time and too much information and tells me that you have done the research to back up what you are saying. It gives quantifiable specifics (that should be backed by actual research), and it gives a metric of which a company can judge itself - reducing the time spent reading and increasing the amount of new information consumed.
Focus on the Right Things
This article is a long piece on a simple idea. Product-market fit is a common, and often avoidable error in small companies; don’t let yours fall into the trap.