First, Get A Product You Can Sell–Part 1
I have been consolidating and prioritizing my messages for early-stage entrepreneurs. I think that success starts with one simple task: coming up with a product that people will buy. I often talk about bringing ambition and commitment to the table, and that is critical as well, but no amount of ambition or commitment is going to overcome the lack of a product that people, people other than yourself, will see VALUE.
You probably have a product or service idea you want to build into a business; otherwise you might not be reading this. Whether you’re starting a physical-product business, a consulting business, or a retail store, the most important question you have to answer is this: will people give you money for it? Remember: without revenue from paying customers, you won’t have a product to build a business around. So, before you invest a lot of time in building a business plan or developing the final product, the challenge is to make sure your product will provide a substantial value to a lot of people, value sufficient to induce them to part with their money in exchange for it.
How do you create sufficient value? Value is a function of benefit divided by cost; the wider the spread between benefit and cost, the stronger the value. The stronger the value, the more likely it will be that you can create a motivated customer. “Cost” can be much more easily calculated than “Benefit”. Benefit is a tricky word; not everybody will see the benefit in your product solution. To use a well-worn cliché, Eskimos would see less value in having a refrigerator than would someone living in Panama. Basically, the bigger the problem that a certain set of people have, the more benefit the product that solves it will offer—and the more likely they are to purchase your product.
There’s another qualifier: the size of the market. If your product is only attractive to left-handed, blond, male Eskimos between the ages of 10 and 12, you might not have many prospects. However, if your product offers a powerful solution to a very wide swath of the population, you may really have something.
It comes down to the three critical questions:
- Are there a lot of people who really have the problem your product is trying to solve? (stress the words ‘lot of’ and ‘really’)
- Do they have an urgent need to solve the problem? (stress the word ‘urgent’)
- Does your product offer a compelling solution to their problem? (stress the word ‘compelling’)
You may be the only person in the world that thinks the problem your product solves is a significant problem. What if the vast majority of your target customers really don’t care, really don’t recognize the issue as being up to ‘problem’ status? Then, there’s no basis for needing a solution.
Now, you may have identified a problem that a lot of people have, but none of them really think it important to find a solution; it simply isn’t ‘urgent’ enough. Urgency is a critical component: it drives the foundation for the motivation to pay for a solution. Little or no urgency will not produce motivated customers; there simply is not enough perceived value.
You may have identified a problem that is shared by a lot of people and you have determined that customers indeed have a strong degree of urgency to find a solution, but your product sucks. A product can fail because: it doesn’t work, the cost is higher than the perceived benefit, it is too hard to use (the ‘effort’ part of cost is too high), or a competitor simply does it better.
If you don’t have a good answer to all three questions, you may be ready for a new idea. In Part 2, we’ll talk about how to get definitive answers to these questions and determine whether or not you have a product worthy of further development.