Startups need a problem, not a solution

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If you have an awesome idea for a new startup, stop. Write down your solution, put it away and start by identifying the problem that you’re trying to solve.

Contrary to popular wisdom to “Always focus on the solution not the problem” building a startup is not about knowing what you want to build up front. It’s about knowing what problem you want to solve and constantly evolving the solution to better fit that problem.

The surest way to fail at building a startup is to try and build a product. Chances are, no one is going to really want it and, like 1000’s of other really well designed & built products, it’ll be a dead end. Look no further than Google Wave, Minidisks (MD’s), Microsofts WebTV or  Facebook Home: They’re some of the most popular, highly funded failures that overlooked a need for the customer. They were great concepts and products, but they didn’t originate from a customer need.

What you need to focus on is the problem that you’re solving. 

The difference is that when you focus on the problem, it frees you up to constantly test and improve your solution to better fit your customers. They’ll help guide you to build a product that people actually want and in doing so massively improve your odds of success.

If you focus on the problem (getting from A to B) there may be many simpler ways to solve it. If it’s a big enough problem, even a basic solution will take off. *

By trying to approach the problem with a fixed solution in mind, you look for evidence that supports it. You have a hammer and everything looks like a nail. As such, you’ll find yourself going down a certain path without actually ever validating that it’s the best one, or continue to build out features as customers don’t want it *yet*. The worst thing you can do at this point is raise lots of money to build your solution as it’s only going to delay the fail and be infinitely more painful further down the line.

The best way to build a solution is to go to your customers with a problem and ask them how they’d like it solved. “What about if you had this”, or “would they prefer if they had that”. Look at how they’re currently solving it (and I hope they are if its a problem) and build out an offering from their feedback. Thats when you build an MVP – the absolute minimum that you can do that will solve your customers problem (at least in a small way).

By focussing on the problem it helps you:

  1. Continually evolve your solution to be a better fit. This should continue as you grow.
  2. Focus on your customer and getting feedback. “How can you solve it better?”
  3. Find much more innovative solutions by asking “what if…”
  4. Find cheaper ways to test your idea. Everyone wants to build an app/website/device to solve a problem. Most times, if it’s a big problem, you can test it by solving it manually and seeing if people want it.

So next time you think up an awesome gadget / service / device / thingy-ma-jig thats going to change the world, stop. Focus on the problem and rather build something really useful that customers are telling you they want. ‘Cause thats how you build awesome things.

 

*Image credit: http://fastmonkeys.files.wordpress.com/2014/06/howtobuildmvp.gif?w=500

The value disconnect

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Don't get caught by this!When you’re looking at starting a business, the one thing that you need to be very careful of is who has control of whether you succeed or fail. One of the most common (and most fatal) flaws in a startup business model is when they don’t control the value that they provide – and as such aren’t in control of their futures. This is surprisingly common!

TEST: Any business that cannot provide it’s primary value to only one customer runs this risk.

You’re guilty of this where you are dependent on someone else providing information, a service, a deal, opportunity or product. Any time that you cannot control the value that you are selling to your customer. This (seemingly obviously) poses a difficulty when trying to find a way to make money. Continue reading

So you’ve got a startup idea. Now what?

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I come across a number of people who have an idea and want to be entrepreneurs, but have no idea where to start. And most ideas remain just that, ideas. Knowing how to get to where you want to go is the part where the most ideas fall flat. Thats what this post is about: the steps you need to follow in turning your idea into a business. It’s not rocket science, but there is also no silver bullet. The steps below are just a guide where the details will depend on your idea, market and a whole bunch of other factors. This is just a place to start.  Continue reading

Quick business plan test: What? Who? How? Why?

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At a recent StartupWeekend type event I mentored at, I noticed that many people don’t know how to quickly test a business model. Plenty had an idea, but had no way of knowing what the next step is. All you need to ask is What? Who? Why? How? and then test every answer and update. Continue reading

A small business is NOT a startup!

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The phrase ‘startup’ has become very trendy and is heavily overused. With governments and incubators touting ‘startup support services’ and ‘growing the number of startups’. Everyone seems to think that any early stage business is a ‘startup’, which, in my opinion is very misleading. Most of the time what they’re talking about is a business starting up.

Every business needs to start somewhere and at some point it will be small. Does this mean that all small business are ‘startups’? NO!

Let me clarify. A ‘startup’ – in the sexy trendy sense – is a small business with high growth potential. They’re highly scalable and can be very profitable. Small business that remain small business or grow slowly into medium size businesses are not this. (i.e. just a business starting up) NOT a startup (in the sexy, Silicon Valley, big potential kinda way.

Venture capitalists, rapid IPOs, ‘overnight’ success stories only happen when you’re swinging for the fences and aiming for the sky. This is not the trajectory of normal businesses. No matter how you are funded, you must be thinking big to call yourself a startup.

There is nothing wrong with starting a normal small business, wether it’s a lifestyle business or not. But not distinguishing between one that has real potential and one that is just mediocre is a grave mistake. You have to approach the 2 totally differently in every way. Your strategies are totally different. And if you don’t distinguish what you’re aiming for well enough, you’re always going to do it badly.

Be careful taking advice on your startup

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Founders generally fall in the category of knowing enough to see an opportunity, but not enough to see the obstacles. Which is normal, as otherwise they wouldn’t start in the first place, but this means that they need to rely on a community of people to get feedback, guidance and to learn from others experiences.

I’ve had a couple of instances of late where entrepreneurs with very viable businesses are told that their idea is not feasible, not scaleable or not worth their while. It normally comes from a VC (or incubator). The advice is not wrong – possibly misplaced – but the one thing you need to be very aware of is the motivations and perspectives of the person giving you advice.
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