Simple Question: Who’s your Customer and What Problem are you Solving?
Ideation generation is fantastic and without ideas, we wouldn’t be working with the type of products, services and business we currently engage with. But as a business, if you are a start-up, at early scale or an organisation looking towards growing a product, idea validation is the most important and the real challenge you face.
A product or business idea must balance customer risk, market risk and technical risk and sits at the intersection of the 3 lenses of the IDEO Vern diagram of desirability, viability, and feasibility.
But tackling all three risks at once can be overwhelming. How far do you go on each one and where do you start?
Ash Maurya developed the Lean Canvas which is a great exercise for baselining an idea and internalizing the “business model as the product” mindset.
The Lean Canvas allows the entrepreneur to sketch out their business idea using 9 boxes and can be completed in around 20–30 minutes. Compare this to the traditional business planning process of completing slide after slide of PowerPoint presentations with content that doesn’t make real sense and is full of unknown assumptions.
However, at the earliest stages, it helps to more narrowly focus on just the two outer boxes of the canvas: Customer segment and Problem.
Think of the outer boxes of the canvas as the foundations of your business model. If you determine your customer incorrectly or focus on the wrong customer problem, the model will collapse as if your house was built on quicksand. This goes back the quote by Ash Maurya “Life’s Too Short To build Something Nobody Wants”.
Failing to tackle this section is like Playing Darts Blindfolded.
Therefore, focus on the early stages of defining these segments in detail. Think of a shotgun more than a machine gun approach. You can also use this customer/problem quadrant to test your desirability, viability, and feasibility risks.
What does it take to get your potential customer to stop scrolling on social media, read an article and search for your product? This is where building a compelling unique value proposition is important. A good UVP is narrow (targets early adopters) and specific (nails a problem).
If you can describe your customer’s problems better than they can, there is an automatic transfer of expertise — your customers start believing that you must also have the right solution for them. You have to become an expert in the customer problem, don’t love your solution but focus on loving the problem.
You’ve probably experienced this at your doctor’s office. After receiving a successful diagnosis, you probably believed your doctor had figured out your ailment, and you rushed to fill out their prescription — even though your doctor was simply following a systematic process of elimination by unpacking your symptoms (educated guessing). Marketer, Jay Abraham, calls this phenomenon the Strategy of Pre-eminence.
Describing problems better than your customers grant you super-powers.
A common problem that innovators and entrepreneurs make is pricing their product like an artist instead of demonstrating the value that they can bring to solving the client problem.
Customers want to buy a solution to their problems in order to achieve a desirable outcome. It follows then that pricing should be set relative to problems and outcomes — not your solution.
The best initial evidence of viability is
Cold, Hard Cash.
If your customers are currently spending money or wasting time on solving a problem with an existing alternative, that’s often a good enough proxy signal for a problem worth solving at this stage.
If on the other hand, you can’t list any existing alternatives, that’s a red flag.
If you were building a house, would you start with the roof? Of course not. In the case of building a product, start with the problems and then develop your solution towards that problem.
If your customer and problem assumptions are not yet grounded in empirical learning, it’s prudent to first get them in order.
Therefore, as this short article outlines, start with understanding the customer segment and problems. Really get into the detail and build your solution from there.
Don’t build your model on rocky foundations and then have to pay someone to fix it down the line.
The ideas in this article were developed and taken from Ash Maurya @ Leanstack and have been adapted to fit my thoughts. If you would like to understand more about developing products as a start-up or within an organisation, follow me on LinkedIn.