I think you'll agree with me when I say:
It is REALLY hard to make your business succeed.
Well, it turns out, you can greatly increase your chances by asking yourself the right questions early.
Answering them will help you focus on the right things to work on. Especially since we engineers always want to just build new stuff and avoid other important parts of creating a successful business.
To get you started, I have compiled a list with some of the most important questions.
Now it is on you to go through that list and really answer the questions for your startup as honestly and objectively as possible.
I promise, it will save you a bunch of troubles in the future.
Let's dive right in.
You should make sure that you really understand the problem that you are solving. For this one, try to answer the questions from your customers' standpoint, not yours.
- What is the problem I am solving?
- Do the potential customers even know they have that problem?
- Are they actually interested in solving it? (Sometimes they complain about it all the time but not really willing to do anything about it.)
- Are they actively looking for a solution?
- Is the problem costing them money?
- How much money does it cost them?
- Are the costs of the problem direct (ex. workaround is super expensive) or indirect (ex. a not so nice design)?
- Is it a constantly recurring problem? (Necessary for making SaaS work.)
- How often does the problem occur to them (daily, weakly, yearly, ..)?
- What is their current workaround around the issue?
- How much does the current workaround cost them?
- What is the problem with the current workaround and how large it is?
- Will the customers have more of this problem in the next 5 years, will it stay the same or get smaller?
- Is the problem making them wake up during the night thinking about it? (If not, then maybe they don't have the energy to deal with it.)
- Where on their list of priorities does this problem fall: top 3, top 5, or top 10? (If not in top 3, they maybe don’t have time to talk to you - HT Tom Tunguz)
- How urgent it is for the customer to solve the problem?
- Is it a new problem or an old one?
- If the problem is old, ask yourself why nobody solved it yet? (If there is no new external factor that now makes it possible or worth solving it, ask yourself why it is not solved yet and why you specifically can make it work.)
- Do customers talk to each other about the problem or is it something that they don't want others to know?
- Do I need to pre-educate users and show them that they actually have the problem? (This makes it way harder compared to if they already know they have it.)
- When chatting to the people experiencing the problem, how emotional are they about it? (Search for strong emotions.)
- When talking to customers before I have a product, are they just helpfully chatting with me or are they willing to give me something valuable in advance, ex. money, a lot of time, reputation?
You should understand the audience you are solving the problem for incredibly well. They will be your boss for the next couple of years. Questions to ask yourself:
- Do I know who are my customers?
- Who is my early adopter ie. your first sub-niche that the problem impacts the most? (Be very specific, single moms in 30s are too broad of a group.)
- Are there more niches that I can later expand to?
- Is the total size of the market large enough that I can make the business of the size I want?
- Does my audience even have enough money to spend to make sense for me? (Don't charge too little if you are a bootstrapper, pricing affects everything - Jason Cohen)
- How well do I know the industry? (The answer should be very well, otherwise, you have some work to do.)
- How long are the sales cycles in the industry?
- Is the customer the one that pays?
- If not, who is the one that gives me the credit card and what does he gain by paying to solve my customers' problem?
- Does the person paying understand the importance of the problem?
- Are the potential customers even interested in talking to me or are they hard to reach?
- Can I get 30 of them to talk to me about the topic?
- Did I already talk to some potential customers? (Go do it now! Make sure to go through The Mom Test by Rob Fitzpatrick first.)
- Considering my solution will have multiple pricing points. Who will be paying the highest price? (Identify what they have in common and focus completely on this type of persona. Forget the rest for now. Those people experience the problem most severely and you will learn the most from them.)
If you have verified that the problem exists and is worth solving, you can dive into looking at what a good solution would look like.
- Does the solution plugs into my user's existing habits? (Don't expect people to just drastically change their habits to use your new tool.)
- How long does it take for the user to see results by using my solution?
- What are the switching costs to move to my solution?
- Is it a winner takes all market or is there space for multiple solutions to coexist?
- What is a single (not two or three) functionality that the potential customer would be willing to pay for and use? (Ignore the rest when you start.)
- Can the customer afford to pay the price I need to charge?
- Are there any solutions already solving this problem in some way? (Competition is healthy as it helps to validate the existence of the problem. Also, being first is not a competitive advantage - Jason Cohen)
- In what way am I greatly different than my competitors?
- Do my customers actually care enough about my differentiation to other competitors that it is worth for them to use my solution?
- If I can only have one single thing in which my solution is better from the competition, what should it be?
- Is this also the most important thing my customers care about? (If you care, it doesn't mean they care as well.)
- How long will it take to build it?
- If the time to build will get 5x longer than anticipated, will the idea still be viable and will I still have the resources to pull it off? (This might actually happen.)
Even if the problem exists and your solution is the best on the market, it accounts for nothing if you can't reach enough customers in a continuous, repeatable and affordable way. Try to validate this before putting too much time into building your solution.
- Where are potential customers gathering?
- Where can I reach my early adopters / sub-niche?
- Over which acquisition channels can I reach the customers consistently over a long time period?
- If I can only choose one acquisition channel, what would it be?
- If I only used this one channel, will the business still be viable?
- What would be the cost of acquiring a customer over such channel?
- Does the cost of acquisition over such channel makes sense with the price point the customers are willing to pay?
- Can I get enough customers over such channel so that the business makes sense?
- Do a Fermi estimation of your business model as explained by Jason Cohen. What did I find out?
- How many of the audience can I reach over my channels? (Where can I get to the others?)
- Did I test the distribution channel to my audience to see if it actually works in practice?
- Is there a barrier to entry to the market? (License, certification, other legal stuff, etc.)
- Can I convince the customer to convert over the channels available to me? (Their exposure to your product is usually limited.)
- Will this make a large enough margin for me to make enough profit?
- Who are people that influence my potential customers (who are the customers reading, listening to, following, ...)?
- Can I reach those influential people and will they be willing to listen / help?
- Can I build longer-lasting relationships with them?
- How many of my customers can I reach over those people?
- How many of my customers need a solution now?
- How many of them are even accessible over the internet?
- How many of them are searching for a solution online monthly?
- How many of them wish exactly what I am offering?
- How many of them are willing to pay exactly the amount of money I am asking for? (You can make a very rough estimate, it should still help you.)
You should really ask yourself the questions below before you do anything else. The business if successful, will make or break your life in the next couple of years.
- Do I genuinely like the type of customers I will be solving the problem for? (They will be your new boss and you will be talking to them all the time.)
- Does working on this problem align with my long term personal goals?
- Does working on this problem align with my long term career goals?
- How stressful this business will be? (if you sell shoes or do security products for banking, there might be a huge difference in the level of stress that goes along.)
- Do you have an existing network in the industry? (Use it to get a head start! If you are too afraid to use it, then maybe the problem you try to solve is not important enough.)
- How much money do I want to make?
- What I want my work-life balance to look like? (Influenced by how slow or fast paced and changing is the market you are jumping into.)
- What really motivates me?
Go through all of the questions and try to validate them. Notice which ones were the most uncomfortable for you to think about and which ones were hardest to validate. Answering those well might be a good place to start.
Did I miss something?
Which question made you the most uncomfortable?
Let me know in the comments.
Good luck on your entrepreneurship journey, I am cheering for you! 🍻👍
Big thanks to everyone that inspired me to think about building businesses differently. I am still early on in my journey where good advice can make all the difference. Shout-out to @IndieHackers,@asmartbear,
@robwalling, @robfitz and others.