Listening to someone saying your product seems interesting is a powerful drug. This principle applies (with adjustments) to many startup situations such as pitching to investors or consulting with friends. I want to shine a light here on potential customers/users conversations because their importance is absolutely immense.
When you want to create something, service, product, whatever, that people will use, your most important task is to see if people need it. For experienced entrepreneurs this is stating the obvious, but for first timers — you’d be surprised how not self explanatory this is. I think mainly because we all fall in love with our own thoughts and the realization your idea might not be good is something you gain with mileage.
Anyway, the first step is to validate the need for what you want to build. This could come in many forms, and for the Hebrew speakers I recommend this “Startup for startup” podcast episode, featuring the founders of Monday.com and Wix, so…. pretty knowledgeable people. To make a long story short, what you are looking for is people saying they need what you are creating. The problem I wish to discuss is what constitutes “need”. When would I know the person in front of me needs my product and actually gave me a positive answer to my validation question.
My answer would be “when the money is on the table” and only then. Allow me to explain:
Take 10 random people and ask them what they think of finding a parking spot in the city. It’s hard. What they think about a solution that reserves a parking spot for you or tells you where a parking spot just freed up. They love it. You run back home and start wasting your time on building this solution. This has been tried numerous times and failed over and over again. The 10 people you asked didn’t want to lie to you but they did because you tricked them into it. We all have positive thoughts on things that do not exist. We don’t need all of them.
The way to help your audience tell you the truth is to make them confront the money issue. How much will you be willing to pay for X. Every need translates to currency and this is where a weaker need is revealed. You’ll quickly find those same 10 people have a paid parking lot within walking distance of their destination and they are willing to pay small amounts for your parking spot. holding this spot all day is expensive and the unit economics doesn’t add up.
With B2B offerings this is even more important. Your interviewee has many problems at work and he would like to make his/hers life easier. He has no incentive to give negative feedback and no incentive to be honest when it may cause discomfort. To help your interviewee you want to ask “will your organization be interested in paying to solve this issue”, followed by “who is authorized to make this decision”. Your goal is to get a “yes” to the first question by a person whos answer to the second one is “me”.
Another soar spot is B2C ventures that count on selling ads. Facebook doesn’t cost money as well, they say. Please let me say that nothing is free and no company is built on good will. If your business model is selling ads, then your customers are not your users, they are the advertisers. In that case, you are building a product or service that will capture people’s attention, and then selling that attention to advertisers. Selling users to advertisers is a crowded space to say the least, and to succeed in doing so you need to be very good at what you do. Very, very good. You need to be Spotify good, Facebook good. You need to be an expert on user acquisition and a master of user retention, efficient in operation and innovative in content. It is possible, but never assume “selling ads” is an easy way out of charging money.
Best case scenario is to not only get a clear answer, but to actually realize the pain is even sharper than you imagined. This is what happened to me and it is a common scenario: you think you need to make this big complicated thing but actually people just want to have this tiny task automated. Worst case scenario is also good. Worst case scenario you find out there is no real need, which is great, because it saves you time and allows you to move on to the next thing.
Bottom line is our mission as entrepreneurs is to resist this temptation of believing lies. Confront the desire to believe the simple answer of “sounds cool” and pin your audience down to their wallet, by asking “is this something you are willing to pay for”.
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