As I talk to clients and read about the challenges startups face, I thought I’d share my belief which will hopefully help you on your entrepreneurial journey. People who attempt startups do not invest enough time or have the right process to validate their idea with Customers. Now of course there are exceptions, but since the majority of startups fail, I believe this to be a major contributor, perhaps the #1 contributor. Running out of money and poor execution are also significant factors.
When I talk to people about how they came up with their business idea, I get responses that generally fall into one of these three areas; “it’s a pain point I have”, “I think it’s something people will want” or “I can create / deliver better than existing alternatives”. These are all very legitimate and valid reasons to go and start a business. But starting a business is high-risk. It takes a lot of time and some investment, i.e. app development.
If you’re buying a house, a vehicle or planning a nice vacation, don’t you do some online research first to make sure you’re making the right choice? Perhaps you even reach out to friends and family for their feedback and experiences? You may initially have a certain style of house you’re looking for or a certain car make and model you want. But then you start researching online and talking to people. You begin to realize there are some things you hadn’t considered – the location / neighborhood of the house, tax rate, school system, etc. Or for a vehicle, what is the fuel economy, resale value, insurance costs, safety rating, etc. Your choice begins to change a little. You are now able to make a better, more informed decision.
Similarly for a business idea – you need to do some research and talk to people before taking the plunge. While you may think you have the next best thing, you need to validate the idea with people who will be potential paying customers. The “build it and they will come” mentality is something you should be very wary of. By talking with people first, not only do you get some potentially great ideas for your business, but you’re also creating a list of prospects to sell to once you’re product is available. And having that list beats “cold-calling” strangers to sell them your product.
Some people get concerned with sharing their idea before a product is even created for fear of their idea getting stolen. Generally speaking, this is an unfound concern. Starting a business and executing it is hard. There’s so much that needs to “go right” in creating a business so chances are if someone did steal your idea (and almost guaranteed they won’t), they still need to execute. And since it’s your idea, in theory, you’re already ahead of them anyway (right?). BTW – if someone did steal your idea, consider it a form of validation that your idea is something worth pursuing.
Now that you have the idea for the “next best thing”, do yourself a favor and don’t start developing it. Start talking to people who will use your product as well as those you will buy it. Identify the user-personas and then create a list of actual names for each of those personas. Get out and talk to them. As a rule of thumb, you should talk to at least 10 people for each of those personas – 20 would be better. There are plenty of resources to help “interview” people which I’ll plan to cover in another blog post. If you’re new to doing these interviews, The Mom Test is a good quick read to help. Just remember – you aren’t pitching a product idea with them initially. You’re validating a “pain point” and developing a better, more complete description of that pain point. This includes describing what the “outcome” that your to-be-created product will deliver.
As a side benefit of doing these interviews, if you’re not comfortable with “selling”, these up front discussions with people can help you “ease-into” selling. There’s much less on the line because you’re not trying to make a sale – you’re just trying to get feedback. Mentally this can be much easier than making a sales pitch. These up front interviews will also help you start creating your sales copy for when you do start pitching to prospects. And since you’ll be developing your sales copy very early on, it will give you the advantage of more time to test out the pitch and refine it. All good things to help increase your chances of launching a successful company.