Between having a business idea and realizing business success, there is a gap. Sometimes this gap is small, usually when the idea is small and the idea holder is experienced and capable. However, sometimes this gap is so huge it never gets crossed, and the idea dies. The following five questions will help you bridge the gap between idea and success. Together, they comprise a simple guide to what you research, how you think, and what actions you take to achieve success. In fact, they are so simple that you might even overlook them in favor of thinking about your idea. But without answers to these questions, you’ll never cross the gap, and your brilliant idea will never materialize outside your own head. Trust me, I know. I’ve lived through it.
Let’s face it, it’s hard to start something from nothing. There’s a lot of information out there about people who are doing “great things.” There are a lot of self help books with hundreds of pages of suggested practices. But when you’re just getting started, all of this information can be overwhelming. In 2010 I quit teaching and tried to start a business. I read books about entrepreneurs. I learned about building web pages. I partnered with a couple different people on various “projects.” I never got any real traction. The simple reason: I had no filtering mechanism. I had no way of taking my idea and making it real. I didn’t have the 5 Startup Questions.
After two years of decoding the processes behind entrepreneurship, the Chicago startup scene, and the way people learn, I am now ready to start again. This time I know how to stay focused. This time I have specific questions to answer. Answer them with me, and let’s turn our big ideas into successful ventures. Let’s cross this gap together.
Question 1: What problem do we want to solve?
If we’re not solving a problem, no one is going to listen to us. We’re not going to get funding, we’re not going to get support, and we’re not going to motivate people to take us seriously. You’ve heard of solutions in search of a problem? Ideas that aren’t tethered to a problem may enthrall the idea holder, but they don’t captivate anyone else. Sometimes the problems are subtle and not clearly articulated or well understood by our users, but we better know what they are. Here are some examples:
- Apple: Solving the problem of people’s frustration and anxiety concerning technology
- Facebook: Solving the problem of loneliness and boredom
- Trunk Club (Chicago-based men’s clothing startup): Solving the problem of men who want to look good but don’t know how (or don’t have the time) to shop on their own
Question 2: What experience do we want to create?
Sometimes we get too invested in solving a problem. We forget that people don’t always want to be reminded about how painful their problems are. Sometimes the problem we’re solving is small or hard to describe. What inspires people more than solutions to their problems, is the ability to envision themselves enjoying a problem-free experience. What experience are we going to create for our users that’s going to inspire them to choose us over the competition? Some more examples:
- Apple: Creating the experience of simplicity, power, and beauty through technology
- Facebook: Creating the experience of connection, self-expression, and intoxicating voyeurism through online sharing
- BeerOn (Chicago-based mobile beer concierge app): Creating the experience of expertise and support for bar patrons
Question 3: Who is willing to pay to experience this solution?
If we don’t have someone paying for our product or service, we don’t have a business. Sometimes who’s actually paying is not our customer. For example, the flow of money gets muddied whenever we’re offering a “free” solution to someone and then selling what they look at to someone else (advertising). Another form of muddying the cash flow occurs when VC’s give money to a company that isn’t generating any revenue. This is how we ended up with the first tech bubble (circa 1995-2000), and how the second one we’re in now continues to inflate itself. Let’s avoid the trap of offering a product or service that needs to be free in order to entice people to use it. Instead, let’s ask: who’s willing to pay to experience our solution?
- Apple: Anyone who can afford to pay for technology that makes you feel good when you’re using it.
- Facebook: Can you figure this one out? Facebook got its money from VCs while its product was free. Then it got a residual from companies (mostly app makers) that made money from its users. Now it gets advertising money. So Facebook makes its money not from solving its original customers’ problem, but from solving the “access-to-potential-customers” problem of marketers and app developers. Where will this lead…? I think I’ll save that rabbit hole for another post.
- The Starter League (Chicago-based education startup): People who want to learn how to design and develop web apps.
Question 4: How will we know when we’ve successfully delivered to these people?
A couple weeks ago I had the fortune of speaking at Prototype Camp. During his keynote, Jared Spool, founder of User Interface Engineering, the largest usability research organization of its kind, said something quite simple and profound. He advised us to know what we want to measure before we start measuring. What do we want to measure? Do we want our solution to be temporary or finite? Obvious or subtle? How long do we want the experience to last for? Is there a metric we’re not thinking about? Let’s always be setting the bar for our success, and let’s always be tracking just how far above or below we are when we deliver.
Examples (These are only guesses since I don’t sit on their boards):
- Apple: When they are the biggest company in the world? When they have finally “defeated” Google and Microsoft?
- Facebook: A certain number of users? Percentage of world population? Time user’s spend participating?
- Spartz Media (Chicago-based internet media startup): When the value of their sites’ content is demonstrated in the amount that people share it?
Question 5: What technological implementation will allow us to deliver to these people profitably?
The big question. When we get here we’re pretty much home free. Now it’s just an optimization problem. What’s the best platform? What’s our competitive advantage? What’s going to keep us sustainable? Unfortunately, this is usually where most entrepreneurs start or stop. If you start here, you’ve missed the whole point of user research. If you stop here, then you’re probably thinking too narrowly about how to deliver your solution. There are many companies out there that try to solve things on the web that are better solved in person… or vice versa.
- Apple: Chinese labor
- Facebook: Innovations in the acquisition and management of data (more on this in a future post)
- GrubHub (Chicago-based food ordering startup): Online, mobile, and location-based ordering
So that’s it. Five questions to keep us on track. Let’s call these the Startup’s souped-up version of the stuffy old Business Plan. When will the answers to these questions change? Frequently. When will the importance of asking these questions diminish? Well if we want to be perennially successful, hopefully never.
Some really good points from Adam here for anyone in that early stage of assessing whether or not to take on the challenges of being an entrepreneur. These are good ways of validating whether you have something more than just an idea. If you can convince on these levels then you will have an investor’s attention. However, you are still very unlikely to close funding unless you can translate that into an executable business plan. At the end of the day the investor wants to de-risk their investment as much as possible. A professional business plan (not a stuffy one!) will show just how much you appreciate that investor perspective and have thought through exactly how you are going to deliver a return to them.
The Business Plan Team