A 4 step process to envision a Unicorn Product idea
If everything happens for a reason, what is the reason for your happening? Help yourselves to find the reason and a way to envision a Unicorn product idea, with these 4 simple steps.
In early December 2020, I realized I was weighing 10% more than my usual. With the metabolic rate at my age of 43, I was a little worried about this weight gain. So I decided to regulate my daily workout to walk/run 30 minutes a day. After a week, I started getting shin pain within half a mile of walk/run. So I was not able to continue my workout session, as planned, and I had to reluctantly discontinue. Not for very long…
What is a Unicorn product Idea?
OK, now heading to the topic (Yes!), If your product idea has the potential to be built to a statistical rarity of over a $1 billion successful venture, it is a Unicorn product idea. In today's entrepreneurial world, there are thousands of ventures started by our fellow entrepreneurs on a daily basis, hoping to become a Unicorn company, yet so far we have only over 450 Unicorn companies in the world. Why?
In a late 2019 CBI Insights postmortem analysis of 101 failed Startups, it was found that 42% of the companies failed because there was no market need for the problem they were solving. Why would one build a product which is not required by anyone?
Step 1: Identify a unique problem
As a first step, an entrepreneur should identify a solution to a unique problem, not the problem for the solution. We should be solving a problem familiar to us. Great ideas are about editing the bad ones out. They are born out of a field test and not imagination.
The hardest part is finding the problem to solve; solutions come pretty easy — Einstein
So how do we find the problem? We should be able to empathize with the situation of the field we are working in and feel the pain the users are going through widely across. For e.g. While we had wired telephones until 20 years back, it was a pain for a caring mother who is attending the newborn baby, to leave the baby and run to the phone to pick a call. Someone was able to feel the pain such people go through, critic the situation, identify the problem, logically think through, and invented the cell phones.
So a problem can be identified by critiquing the situation only through real empathy. The problem can be refined to identify a solution, logically through design thinking.
Step 2: Build a Market Fit solution
While building the right product is important, building the product right is critical. A true product-market fit (PMF) should capture both the power users and casual customers. The power users are ones who are in dire need of the solution, without which their daily lives at work or at society are severely impacted. The casual customers are the ones, who would feel nice to adopt the solution. Typically we should be able to see a split of 20% Power users and 80% Casual customers.
The right product can be built through a Design Thinking approach. Design thinking is an iterative, non-linear way of working that seeks to understand users and solve problems, by looping through these five phases — empathize, define, ideate, prototype, and test — until the problem is refined to a viable solution.
We should be doing the simple things first, and take the guesses quickly and fail fast if we have to.
We should also keep in mind that the product should be kept ridiculously simple and stupid, as a 1-year-old kid can browse through the YouTube videos on their own within 5 minutes.
And before moving on to the next step, we need to make sure that we have the passion to solve the problem we picked. Becoming a successful entrepreneur does not happen overnight. It might even take 2 years to see the first dollar. Unless we have the passion to solve, we will not be able to carry ourselves to the point where we start making revenue.
Step 3: Solve a problem within your expertise area
Investors (usually) don’t fund ideas; they fund promising teams and products. The founding team should make sure, they have enough in-house expertise to build the product; at the very least, to build a minimum viable product.
The team should commit to rapid growth. It is important to know how to build the product in a lean and iterative way. The overall time to build the product is less important than the ability to iterate quickly.
The least valuable first launch should follow a Critical Viable Product building approach — a software development technique to build a version of a new product that allows a team to collect the critical amount of validated learning about the customer with the optimized effort.
And the key factor while building the product increments should align with the Go-to-Market Strategy. Each increment should align with the next marketing strategy.
Step 4: Define appropriate business model and Go-to-market Strategies
The strongest startups are built to maximize growth, not profit. Growth is defined based on more number of users the product serves. It should fit well into an already existing ecosystem, where it can scale globally. We need to create momentum to see to the initial market, the power users.
Strategy determines the magnitude of any endeavor and execution determines the degree of achievement. The strategy is a number between 1 and infinity and execution is a number between 0 and 1. That means no matter how well you operate, your execution will never outgrow your strategy potential.
Success = Strategy (1–∞) x Execution (0–1).
The Business model should be well aligned to the growth model. It should both have basic services for wider adoption and value-added premium services to cater to the customized needs.
Summary: The intersection
When we have found a product idea intersecting all these 4 areas, we would have envisioned a potential Unicorn Product Idea. Looking at this intersection will give a sense of the whole purpose of the venture and to our lives, as well.
Ikigai — Iki (生き) meaning Live, Kai (甲斐) meaning Worth — is a Japanese concept meaning “A reason for being”. It guides to have a direction or purpose in life, that which makes one’s life worthwhile, and towards which an individual takes spontaneous and willing actions giving them satisfaction and a sense of meaning to life. You should be able to connect how each area we discussed above relates to each area depicted below.
If we lose sight of one area, we lack something. For e.g. if we do something that we love, are good at, and be paid for, but something the world does not need, then we would feel useless. Likewise from the below picture, we can understand the impact of losing sight of each area.
Without a purpose, the actions are meaningless. I was able to quickly route back to the purpose why I started my workout session, 30 minutes walk/run. All I had to do is to keep up my heart rate at 130 bpm for 30 mins, burn the calories, and lose weight. So I devised another workout session and broke my sessions with rowing 20 mins and 10 mins walk/run and lost the weight. If I didn't have that vision, I would have stuck and stayed with my failure. The mission can change, if it still aligns with the vision, the purpose.
If everything happens for a reason, there should be a reason for our happening. If we have found that reason, we would have envisioned a potential Unicorn product idea.
