Are You Building Your Startup Backwards?
It’s a problem that plagues nearly every entrepreneur, and most never even know it
An entrepreneur came to see me with a problem. She’d spent 12 months building a phone app to help diabetics track their daily exercise. But, six months after launching the app, she hardly had any users.
“I just don’t understand,” she huffed. “In all our tests, people liked it and thought it was really valuable. So why can’t we get anyone downloading the app? If people would just use it, I’m sure they’d love it.”
I’ve seen entrepreneurs facing the same problem more times than I can remember. They spent months or years and tons of money developing their products, then they launched expecting tons of users to organically appear and start using them. But that’s never what happens. Instead, nobody uses their products, and the entrepreneurs can’t figure out what’s gone wrong.
“I can tell you what’s happened,” I said as I shook my head and sighed, “but you’re not going to like the answer.”
“Please tell me,” she replied. “Anything is better than this.”
“It’s a common problem,” I told her. “You’ve built your startup backwards.”
“Backwards?” she asked. “How can you build a startup backwards?”
“Easy,” I answered, “You built your product before establishing your audience.”
Why entrepreneurs start with products
The first thing most entrepreneurs do when starting companies — particularly inexperienced ones — is begin developing their products. That’s exactly what the entrepreneur with the app for diabetics had done. From her perspective, building the app first made sense because how could she engage potential users without being able to show them the actual thing they’d be using?
While building the product is the logical first step from the perspective of entrepreneurs, when we put ourselves in the shoes of our users, it makes less sense. Users don’t care about our products. From their perspectives, they’re most concerned with solving their problems.
This is an important distinction because any problem can technically be addressed/solved in an infinite number of ways. And note that, by “infinite number of ways,” I don’t mean every problem has billions of possible solutions. I just mean for every X solution you could create, I could come up with an iterative X+1 solution.
Consider, for example, getting groceries. In order to get groceries each week, I need to be able to get to the grocery store. I do that by driving. In this scenario, the car is the product I use to solve my problem. But it’s not the only solution. I could take a bus, I could walk. I could ride a Segway. Plus, other solutions can and will be developed in the future. For example, someday I might be able to teleport to the grocery store.
Beyond that, my problem could be solved in ways that don’t even involve me going to a grocery store. Realizing this, entrepreneurs have built startups that deliver groceries.
The point is, I don’t care about my car. I care about having food to eat. The car — the product — is just one of many potential solutions to my problem.
Because so many possible solutions to a given problem exist, in the early days of building a company, experienced entrepreneurs delay building their products for as long as possible because they don’t want to lock themselves into one solution. After all, what if the product they built isn’t a solution consumers want? Does that mean the problem isn’t worth solving?
Instead, savvy entrepreneurs decouple problems and solutions. This gives them the flexibility to research, understand, and prove a problem exists. Next, once they fully understand the problem without committing themselves to a solution — i.e. a product they’ve already built — they’re free to explore any number of potential solutions until they find the best one.
Audiences are more valuable than products
I explained all this to the entrepreneur I was meeting. She looked more dejected than she had at the start of our conversation. Noticing this, I smiled and said, “I warned you that you wouldn’t like the answer.”
“It’s not so much that I don’t like it,” she responded. “It’s that I’m worried about the implications. You’re telling me every problem has dozens of different potential solutions. So how do I figure out the right one? Do I have to build a bunch of different products? I already spent a year and thousands of dollars building one product. I don’t have the time or money to build more.”
“I suppose that’s the brute force way of dealing with the issue,” I told her. “But there’s actually a better approach.”
“What’s that?” she asked.
“Imagine if, instead of building your product, you’d focused on the problem you’re trying to solve. What problem would you say your app is solving?”
She thought for a moment and then said, “Diabetics who don’t exercise have more difficulty managing their disease.”
“Great,” I said, “You’ve just told me your target market: diabetics struggling to manage their disease. So, rather than building a product those people may or may not want, you should have started by establishing an audience of struggling diabetics.”
“But how do I do that without a product?” she asked.
“Create a YouTube channel for diabetics,” I said. “Or an Instagram account, TikTok feed, blog… whatever. Fill it with tips, tricks, advice, and resources for helping diabetics with their exercise routines or anything else your target market might find helpful. And that’s just one suggestion. There are lots of ways to build an audience. The point is, by building an audience first, you’ll be validating the problem you’ve identified and you’ll give yourself ownership of a perfectly-targeted group of potential customers. As a result, when you do eventually launch something like your app, you’ll already have an audience you can sell to.”
“Oh,” she said as an understanding of what I was trying to explain spread across her face. “I think I see why you said I built my startup backwards. No matter what product I build for diabetics, I’ll have to find a bunch of people who want help managing their diabetes. But, because I built my product first, I’m stuck trying to build an audience by selling my app, which people may or may not want. What I should have done was build a community around the problem I want to solve.”
“Yes,” I said, “When you build your product first, you only have one chance to get it right. But when you start by building an audience of people with a similar problem, you’ve established a valuable resource that you control.”
“That’s brilliant,” she said. “Once you have an audience, it’s much harder to fail because even if a product fails, you still have direct access to the audience with the problem, and you can keep trying to solve that audience’s problem in different ways until you hit on a solution that works.”
“Exactly” I said. “It’s why every great entrepreneur knows that an audience is always more valuable than a product.”