A choose your own startup adventure for your company
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Which vertex is your startup anchored on? There are three main vertices for any business, product, or organization. You should be anchored on one, but you have to be flexible on the other two in order to iterate to success.
The way you go about most things in starting up a company or launching a new product changes entirely based on which vertex you’re anchored on. How you ideate, how you validate, how you iterate, how you advertise — it’s all dependent on what you’re anchored on.
Here are the three vertices:
See how in order to anchor on one, you can’t pivot on that point without being willing to budge on the other two. Reality is a bit more nuanced, but I wanted to start with a graphic this simple to visualize how pivoting works.
Side note: I have danced all around this damn triangle. But really understanding my purpose has gone a long way to helping me rediscover why I was on a specific anchor, and I even launched a fifth birthday rebrand for Mindsense to re-clarify its original anchor once again.
Understanding where you’re anchored, and the implications that has on everything you do can make a huge difference in your ability to start and scale your own company, organization, or product.
Let’s dive in. Depending on which vertex you’re anchored on, the other two layer on in different ways:
We’re looking at three different kinds of startups, based on which vertex they are anchored on. How you approach everything is a little bit different based on which yours is. So first figure out which one you’re in, then read on. Don’t stop there, there’s a bunch more discussion below the three anchors.
First anchor: A specific problem worth solving
If you are dedicated to solving a specific problem, come hell or high water, this is where you’re anchored.
You are the problem solver. This is the classic startup; the most common of the three. You see a specific problem, and you want to solve it. This is also many non-profits / humanitarian organizations (some fall into this camp, and some into the third).
Maybe you are sick of email and want it replaced. Maybe you’re dedicated to helping more kids learn how to code before they graduate from high school.
Whatever it is — you have found a problem that really matters to you, and you want to design and sell a solution for it.
Let’s discuss how you would build up your company and how you might go about considering a pivot when you’re anchored on this vertex.
Validate
The first step when anchored on a problem is to validate the problem. You need to verify that:
- People have this problem
- People hate this problem (they should get emotional when they discuss the problem, or else they don’t care enough)
- People would pay to have this problem solved
The only real way to go about proving your hypothesis that these three things are true for the problem you’ve identified is to talk to a lot of people. Ask them if they experience the problem, ask them “why?” a lot, and write down as much as you can around the words and phrases they use — this will come in handy later.
This entire process from validation on forward I’ve discussed before at length for this anchor.
Ideate
Once you’ve found resonance on your problem, you need to come up with a solution for it. The way you ideate on solving a specific problem might involve a lot of different exercises. There’s lots written on this out there, but here is one that we use: The Toilet Method.
Test
Now you need to find solution resonance. Create prototypes or mockups, design the marketing, and solicit feedback from people that might eventually buy your product. I often will design the entire webpage for a new product and send that to people to get their feedback, since that’s what they would normally see to decide if they want the product (since we sell software to consumers online), and because it takes a lot less time than building prototypes.
As you’re finding solution resonance, you’ll start to identify what type of people really resonate with your solution, and who are the people that most want to pay for it. Look at what sets them apart from the others. Use this time to figure out your first target audience.
Pivot
If you truly are anchored on and dedicated to solving this problem, but you’ve identified during testing that something won’t quite work; the available technology can’t solve the problem in a satisfactory way, or the audiences you’ve targeted don’t resonate with the problem or solution, then you need to pivot on the solution or the customer.
Start by testing your solution with other audiences. For example, we were looking for potential sponsors for an event put on by my wife’s non-profit, Make a Mark. The event is a design marathon to benefit local non-profits, so we targeted the design community: local design agencies, who have nice high margins and could afford to sponsor the event. Not once has any of them come through. Why? Because they gain nearly nothing by increasing brand reputation with 20- and 30-something creatives. So, we pivoted to a new audience: all the local lifestyle brands that stand to make money off of 20- and 30-something creatives knowing about them — wineries, breweries, restaurants, etc. They have razor-thin margins, so we didn’t approach them en masse before, but when we did, they responded very well. Sponsors for the event now include wineries, breweries, cookie delivery companies, an apartment complex, and a yoga studio. Who would have thought? We just had to get creative and iterate on target audience.
See if you just don’t have the right target audience first. Iterate on that a bit and see what you learn. If after a few iterations, it seems like there is no target audience that truly resonates with this solution to their problem, or it can’t be delivered in a form they want to consume it (e.g.: consumers generally won’t pay for subscription software), then start to look at other solutions to the problem you want to solve and build back up from there (meaning you’ll probably end up building back up to a new audience; see the pyramid above).
Market
After the steps above, capturing the attention of your target audience is easy: immediately identify the problem you’re solving for your audience; make them immediately remember the pain you’ll remove from their lives by using the words they used during problem validation. Show them how your solution will solve the problem better than the state of the art (what’s out there now).
Essentially, marketing becomes a rehashing of the steps above. Carry them through the problem and your solution.
Second anchor: A specific technology
If you are dedicated to commercializing a specific technology, and you’re willing to apply it to any problem that any customer has in order to do so, then this is your anchor.
You are the emerging technologist. You see an emerging technology that you know is going to take the world by storm. You’re a little baffled at why most haven’t seemed to realize it, but that’s exactly where you see an opportunity. While no one knows all of the potential of the technology on your hands, you’re hellbent on finding a commercial application. Maybe it’s something broad like VR or RFID, or maybe it’s something only you own in a patent or from research.
Ideate
This approach is certainly the trickiest of the three. You probably already know that if you’ve been down this path.
You know what technology you’re trying to commercialize. You don’t know exactly what problem you’ll solve first, or who will be the customer, but you know you see potential in an emerging technology, and you want to be on the forefront of a wave you believe is before us all.
But your solution is without a problem. The hard part is finding (often non-obvious) applications and truly vetting them to validate the value of the problem you pick (this is the biggest stumbling block for beginners on this anchor).
It’s the hardest because it is not immediately obvious what problem to solve, and who to solve it for. Often, you can think of immediately obvious problems an emerging technology can solve, but not who would buy it in a way that is sustainable for your business. But this is all too often a trap — you then end up stuck on trying to figure out who would pay to have that specific problem being solved, even though you aren’t actually anchored on that problem, and you shut yourself off from infinitely many alternate problems that your tech could solve.
Truly the easiest exercise is to consider different audiences; in the private sector: those who have money, and stand to make money off of your technology. You want to find industries to intersect with yours.
What’s the easiest way to approach this? Talk to a lot of different people. Get their takes. Fresh perspectives will help you find intersections with completely different industries that you can’t even think of on your own.
For example, a friend of mine has been working on commercializing 360° video. An obvious problem he could solve is providing tourism videos to localities and immersive tours to universities. This approach hasn’t been quick to take, however, which is why he reached out to me for a quick brainstorm. It was clear that this audience — tourism departments and universities — was not a great way to go to start something up because they have incredibly long sales cycles (12+ months), and don’t have a recurring need for new content, meaning my friend would only get paid once per customer, and then would have to go find a new customer (10x more expensive than selling to an existing one).
During our brainstorm my friend said something crucial: everyone already has access to a 360° video player — Facebook. This is probably the only avenue most people can interact with 360° video right now.
Thinking about how to leverage the only channel for the unique kind of content he can create, I suggested something that I saw often in my world: there are lots of content publishers that make their money by growing their audience and reach. Think local newspapers, personal brands, consultants making heavy use of content marketing, etc. They publish content all day where people already are: Facebook. At some point 1 or 2 years ago, they all realized that videos capture way more eyeballs than articles, so they all started posting 20–40 second videos throughout the day. Now that everyone has done that, they all need a new leg up on the competition. They need something that will set their content apart from everything else in people’s news feeds. Better yet, they have a recurring need for new content. And since they can directly see the impact their content has on what they care about (engagement and audience size), selling to them would be infinitely easier. Plus, he could first prove the success by spinning up his own content marketing page with 360° videos on one topic (he chose meditation), which exposes a totally new audience to his work, acts as a marketing funnel for him, and acts as a proof of concept for him to learn from and show to potential customers.
It’s not a guarantee, but a totally new and significantly smarter path to go down to commercialize the technology. It is a totally different solution for a totally different audience. The easiest way for my friend to discover that was to chat with someone else, who has a totally different set of experiences and interests, to get a fresh perspective on where intersections may lie for him.
Validate
This is surprisingly easy. It’s a matter of approaching your potential audience and seeing if the problem you can solve with your technology is one they would pay for to have solved. The hard part is listening carefully, and not just hearing what you want to hear, or forcing yourself to continue to go down a path that doesn’t make sense in directionless pursuit of “the hustle.”
Test
Testing is relatively easy too; this is a matter of finding out if the way your solution works is something the customer would pay for. Is your solution in a form they want to consume it? Will they be able to pay for it in a way that works for you? If you need recurring revenue, will they want to pay it? If you need revenue within a certain timeframe, is their sales cycle significantly shorter than that? You want to look for a strong match here.
Pivot
It is crucial when you’re anchored on a technology to remember you have two vertices you can pivot on: the problem you’re solving, and the customer you’re solving it for. When you take this approach, you will undoubtedly have to pivot multiple times before you find something that really catches.
You can pivot on your audience, taking a problem your technology can solve to new audiences and seeing if they would pay. This is the easiest, most obvious path, but also the least likely to be lucrative or successful the more you do it (the more audiences that say no to a solution for a problem, the less likely there is one).
You can also pivot on the problem you’re solving. This is extremely hard (but more likely to be successful) as you have to get incredibly creative about things your emerging technology can do. The nature of emerging technologies inherently means we don’t really know all of its potential yet, but it is your role to show us.
What’s the easiest way to approach this? Just like I mentioned in ideate: Talk to a lot of different people. Get their takes. Fresh perspectives will help you find intersections with completely different industries that you can’t even think of on your own.
While it is hard you should absolutely do it: iterating on the problem you solve is the best way to find new darts to throw at the dart board.
Market
A key thing to realize here is that the audience you found probably doesn’t give a damn about the technology you’re trying to commercialize. They do care about the result you’ve discovered that they want, but they don’t care about the tech used to get there any more than they care about the result of it. While your purpose is to commercialize the technology, that’s not theirs. So don’t market “We’re an AI company…” market “We’ll help you close leads better than anyone else with our AI.”
In the case of the team using 360° videos, the customer does not care about ushering in the era of 360° videos the way the team does, so they shouldn’t advertise to their customers with their company purpose or mission in the headline — that’s irrelevant to why the customer might want to spend their money. It’s an important part of the story, but it isn’t the headline. This is a common pitfall I see companies on this anchor hit.
Anchor 3: A specific customer
If you have a specific audience whose lives you want to make easier, and you don’t care what the exact problem of theirs is that you’ll solve, or what the solution might involve, then this is your path.
This is probably the easiest of the three to execute on, given that you are truly anchored here.
You are the sympathizer. Maybe you met a community of people from a prior gig, and you think they are deeply underserved. Maybe you know the audience well and you know you can capitalize on that with a surefire path to success. Maybe you’re married to a freelancer and you see how many unmet needs they have in their business. Maybe you want to help non-profits up their game because you really believe in their community work. Or maybe you want to connect independent creatives in an online community because you believe there should be a stronger set of independent voices and perspectives in the design community.
No matter what it is, you are looking to serve (and sell to) a specific audience. Probably one you know well.
This is the easiest path because you likely have existing connections or inroads with the audience. And if you don’t have enough, finding your potential customers to chat with is very easy. (Also, this is the other vertex that many non-profits are anchored on.)
Discover
You want to find the first problem of your audience’s to solve. Talk with your audience about the problems they have. Find out what goals they want to achieve but can’t. Where do they want to be, where are they starting from, and how can you help move them from A to B? What services or products have they always wanted to exist? What do they currently pay for that they hate? What is the hardest part of their job or lives?
Ideate
With your research out of the way, it’s time to consider how you can help solve one of the problems you’ve discovered. Take into account your strengths and assets; which problems are you equipped to solve uniquely well? Which ones could you provide a world-class solution for?
As you come up with a solution, it might be easy to attempt to broaden the solution to cover a larger audience. But I would argue that while considering how that might happen in the future is interesting, you should keep it focused for now. This is a great time to start niche. By catering your offering to your specific audience, you can achieve significant success easier, then broaden to other audiences later. Don’t broaden too much now!
Test
You’ve come up with a solution, but does your solution resonate with your audience? It may take a few iterations, but you need to consider a few things here. Is the solution something the audience needs and would pay for? Is it in a form that they want or can consume it in? Is the pricing model something that makes sense for them, their business, or their lives?
Pivot
Don’t forget — you can change what you’re doing, and what problem you’re solving. If one solution doesn’t fit the bill, you can iterate to other solutions to that problem. But if you can’t solve a specific problem, find another problem you might be able to solve for this audience — since you are anchored on and dedicated to this audience.
People are not shy to complain about their hardships when asked; just keep doing discovery to find a problem that you can solve for them better than anyone else.
Market
This one is pretty easy, because you likely chose your target audience as a result of your direct access to them. Start with selling directly to those you know, do a great job for them, and grow via word-of-mouth. You get to leverage old-school direct sales and referrals, which are still to this day significantly more successful techniques when done right (because they can be done authentically, with real human-to-human relationships — don’t forget that!).
Further considerations
Not anchored to any of the three?
Are you willing to pivot on any of these three vertices? Did you read through all three and think, “I could budge on that.” for each of them?
When the going gets tough, you’ll abandon everything? Well, the going will get tough. And you will abandon everything. You have no purpose, and are probably just looking for cash or the prestige of entrepreneurship. Without a foundation, you will waiver.
Find your why. The sooner, the better. A tree needs roots to withstand wind and grow tall.
Anchored on more than one?
Think you’re anchored on two of the three things? You shouldn’t be — and the sooner you figure out which one is truly more important to you the better. If you had to pivot, which of the two could you not let go of? If you were to add other products, services, or offerings to your lineup, which of the two anchors would they still serve? Would you solve other problems for the same audience? Would you solve the same problem for other audiences? Would you use the same technology to solve another problem? Play out some exercises about how you might evolve, and you should be able to discern what you’re truly anchored on.
Purpose
Whatever you’re anchored on should be the connection to your company purpose. It should be evident in your purpose statement. If you’re anchored on serving the design community with a number of different products, services, and resources, then your purpose statement would certainly include something about “serving the design community” with a connection to your why.
Look at your anchor and discern why it’s your anchor. How did you pick it? Why are you married to that vertex and won’t budge from it? Your purpose is somewhere in your answers, though you might have to play a game of 5 Whys.
Changing what you’re anchored on
Here’s a common scenario: you initially set out to solve a specific problem, but now that you have built a solution, you’re looking for other ways to commercialize the technology or solution that you have on hand. What that means is you’re heading down a new path, and if you hit a point where you would have to “pivot” you may end up abandoning the approach entirely as it gets too far away from your original or core business.
That said, you should understand two things: since you’re heading down a totally new path, you need to work in a different way than you have to get to this point. Go through the steps above for both your old and new anchors to understand what you’ll do differently for ideating, testing, marketing, pivoting, etc. This is one reason why changing anchors can be difficult: past successful methods probably won’t apply to your future situations. But there’s another hardship:
You’ll be shifting on purpose. You might be able to finagle the wording of your purpose to fit your new anchor while feeling like you’re staying true to your original, but the truth is, it’ll be a deviation from your core personal purpose as a founder or product designer. Your drive won’t be as strong, so when the going gets tough, you won’t be as strong to withstand it. I have made this mistake before, and I’ve seen plenty others do the same. I have often seen it end poorly. Purpose is not marketing, and it is not nice words to feel good about what we do. It is fundamental to what we do. As a founder, when discerned properly, it is core to everything you believe, the motivations you have, and the whole reason why you have to do what it is you do.
This is not to say that shifting vertices is bad, it’s just risky. Very easily it could be a life-changing move to 10x an already successful business. It could also lead a team astray to spend all of their resources using past successful techniques that no longer apply.
For that reason, I’d say it’s a good move to grow a successful business, but it’s a terrible last-ditch attempt to save a struggling business.
Non-profits / humanitarian organizations
NPOs fit into this model quite well. They usually anchor on the first or third — solving a specific problem for many audiences (cure polio, for example), or serving many needs of a specific audience (defending vulnerable populations, such as immigrants or students on free and reduced lunch, for example).
I mentor a lot of entrepreneurs and startups. Some loosely in one-off conversations, and some on a monthly basis. The majority of mistakes, misunderstandings, mismatched expectations, and unexpected hurdles I see them hit come from issues discussed above. Understanding how your organization fits into this framework, and which vertex you’re anchored on, can go a long way toward ensuring you can clearly see the road ahead, and navigate the map more gracefully.
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