How to create a startup around a real customer problem
These are the essential steps you need to take before you get too deep.
I’m on a mission to help you succeed by avoiding one of the biggest reasons for startup failure, lack of product market fit.
As a startup trainer and mentor, I’ve trained 100+ startups and it pains me to see so many businesses fail each year because they’ve created a product which they think is great, but in reality, has little-to-no market need.
I’m going to spell out the key steps you’ll need in order to create a business that has an actual market need.
Contents
- This is the biggest risk to your business
- Here’s what you’ve been missing
- Now, create something people actually want — here’s how
This is the biggest risk to your business
In Australia alone, 261,000 businesses closed last year 😲 according to the Australian Bureau of Statistics. Forbes together with Statista have determined that around 42% of all startups fail because they’ve created a product that has no market need 😱.
This would mean that around 109,000 businesses potentially closed because they created something people didn’t want… This is not just crazy, but avoidable as well and this is the problem I’m trying to solve through courses like this one.
What if you had the knowledge and tools to avoid early failure?
Here’s what you’ve been missing
Your task, to discover the real challenges, motivations and underlying problems that a given segment of the market has and build a product that solves their needs.
Where to start
Firstly, we need to make sure we’re creating a solution worth pursuing, we do this by first reaching Product Solution Fit (PSF) = Validating whether a real problem exists and defining it.
People only buy the solution to a problem they actually have and a problem must be validated with a market, because supply cannot exist without a market need or demand.
If you’re in business then you’re well aware that a business can’t exist without a customer and enough people out there with the same need.
That’s the first part of the equation then it’s time to reach Product Market Fit (PMF) = Validating what the ideal solution looks like.
Success is directly attributed to validation of your idea.
Confirmation of the problem and validation of the solution are essential to success.
The life of a startup can be divided into before and after product market fit, the last thing you want to do is begin investing and growing a business which doesn’t fill a real market need, you’ll be forever trying to convince rather than engage your market, and you’ll be in a constant uphill struggle.
It’s such a common problem that I decided to put together this course to guide you through exactly what you’ll need to do to avoid investing in the wrong business.
Now, create something people actually want — here’s how
First we find a solution to a problem, then we look for a pool of people who’d buy that solution.
Here’s are some examples of what you could ask your target market at each stage.
Product Solution Fit = Validate Problem
- What is the real problem?
- How important is solving [problem] to you?
- What do you currently use to solve this problem?
- Do you want a solution?
- What should a solution do / not-do?
Follow up questions once you have a solution;
- How well does this solution solve the problem? (1–5 scale)
- What do you like about it? (open ended)
- What do you dislike about it? (open ended)
- What would you add to it? (open ended)
- If this were available today would you buy/use it?” (yes/no)
- How much would you pay? (range between $X and $X)
- How likely would you be to recommend this product to a friend? (1–5 scale)
A couple of questions for yourself at this stage:
- Whose problem is it?
- How big is the market?
- Who are the competitors?
- What is my Unique Selling Proposition (USP)
- How do I make a minimum viable product (MVP), the most basic of prototypes to begin testing
Product Market Fit = Validating the Solution
Once we have an actual solution up and running we have the advantage of having some prospects (from our previous round of feedback) that can give us further insight.
One of the ways in which to understand whether we’ve reached Product Market Fit is by conducting one of the below surveys with our customers, these are called Leading Indicators.
Product Market Fit Survey
- How would you feel if you could no longer use [product]?” (created and popularized by Sean Ellis, you can read more about how it was developed and how to use it on his blog.)
Net Promoter Score (NPS)
- How likely is it that you would recommend our company/product/service to a friend or colleague? (Here’s a link to a full explanation on how to create and analyse the results from your NPS survey.)
- The catch with both of the above leading indicator surveys is that you actually need to have some customers first.
Here’s what we’ve learnt:
- How to avoid the biggest cause of startup failure
- The key questions that tell you whether to pursue or kill an idea
Reaching product-market fit is just the first step in creating a successful startup, once you’re there you need to find out how to get traction and scale your business before going broke ;)
It’s a big topic so if you’re ready to learn the exact steps to take to solve product market fit I’ve created this course and a bunch of free marketing resources to help you along the way.
Next Read: Business Goal Setting Like a BOSS!
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