Does Your Solution Have a Problem?
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In one of my entrepreneurship classes, a team of students came up with the idea of an app for helping young people navigate the local nightlife scene. The app’s focus would be on understanding things like line length, cover charges, and other factors specific to the bars and nightclubs here in Boston.
To the students, it seemed like a good idea (their friends seemed to think so too). Unfortunately, when researching the concept with bar managers — the other side of this “two-sided platform” who would be asked to pay for such a service — there was zero interest. The bars were not seeking additional marketing help nor opportunities to offer discounts to students.
In other words, the app offered a solution to a problem that did not exist in the minds of those who would fund it.
This scenario is not unusual. One of the most significant causes of business failure for early-stage companies is running out of cash — and often, the reason they run out of cash is they produce something nobody wants to buy! The technical term for this is a lack of “product-market fit” and it can apply to new offerings within established companies as well.
But why would people go through all the trouble to start a company and then offer something nobody wants? More importantly, how do you make sure you don’t do that?
I Want It, So You Will Too
Often, founders are so enamored with their idea — a solution they desperately want — that they assume everyone will be, too. This so-called “sample size of one” is anecdotal at best and not a reliable path to gauging market demand.
Another reason for misinterpreting the market is that launching a new product or service has become less and less expensive. Services such as Amazon’s AWS enable startup tech companies to pay incrementally for what used to require a significant capital investment. And there are more tools than ever that simplify software development.
As a result, people dive right into building something, erroneously assuming the risk to be small. But the truth is, coming up with the big idea is the easy part. Turning that idea into a viable product or service is hard. And building a sustainable company in support of that product or service’s business model is even harder.
Start with Research
The best way to find out if you are creating something that people want is to ask them. However, it is important to conduct your research properly, or you risk being misled by the results. Some suggestions:
#1. Have Conversations
Electronic tools (e.g., Survey Monkey) can be useful in certain situations, but that type of closed-ended approach will never reveal the nuances of what people are really thinking. In the early stage of identifying a new idea, you are looking for discussions, not statistics.
So the first step is to discover if other people see the problem or opportunity as you do. The goal is to ask enough general questions regarding the task you are targeting to see if, unaided, the people you meet with will tell you about the problem themselves. If they can’t describe it, they are unlikely to be seeking a solution.
#2. Speak to “Real People”
It’s fine to ask friends, relatives, and colleagues what they think. Just remember they are eager to support you (i.e., say yes to your idea) and may not be representative of your target buyer. Find people who have no interest in telling you anything but the truth.
#3. Beware of Confirmation Bias
As I have written about before, hearing what you want to hear — “confirmation bias” — is a common culprit in skewing research results. Your eagerness to find support for your idea can prevent you from getting to the truth. One way to avoid this is to have an unbiased, external source conduct the research.
Now for the Solution
Once you are convinced you have uncovered a need, it’s time to share your idea. So ask: If this approach existed, do you think it is something you would consider using?
People are not very good at anticipating what their reaction would be to something they haven’t seen or a concept that is still hypothetical, so don’t expect a definitive answer. However, if your proposed solution strikes a chord, you have some positive indicators for moving ahead.
It is also possible you’ll learn of a very different problem that you can address. Then you can pivot and check out whether that presents an opportunity for you instead.
For example, for the nightlife app mentioned earlier, one of the panelists listening to the final presentation suggested that if they were to take a safety perspective and target women users, there might be value in an app that lets one’s friends know where they were. Here as well, it’s just an idea. The only way to know if there is something viable is by doing the research.
Reflections
A solution to a problem that nobody believes they have, no matter how original or elegant, is not going to fly. There’s no market without a buyer.
Critically, and I can’t stress this enough, if you find yourself in this situation, you need to reconsider your plans. Many a company has continued to chase an idea long after the concept should have been reevaluated, if not put out of its misery entirely.