What smart entrepreneurs do different.
What’s your make-it-or-break-it of your startup?
42% of startups failed because they didn’t solve a market need.
The biggest mistake: not building something people will love.
If you don’t solve a problem, no one cares.
It’s way nicer to build than it is to see whether your idea makes any sense.
On top, you want to sell your first customer as soon as possible.
So why would you do anything that distracts you from going towards that goal?
Let me tell you.
They filed for bankruptcy within 24 months.
Webvan is the poster child of the dot-com bubble in the late 90s, and the perfect example of what happens when you scale too fast. Once they raised funds, they quickly set up shop and scaled.
It basically looked like this:
As Mike Moritz, Sequoia’s Partner responsible for Webvan, said: they “committed the cardinal sin of retail, which is to expand into a new territory before demonstrating successes in the first market.”
It’s typical for startup failure.
- People have an idea
- They build the product
- Promote it
- Customers don’t buy it
- The startup dies.
How can we do better?
The antidote to startup failure
As an entrepreneur, you should have one goal.
No matter what your area is — whether your in Retail, FinTech, IoT, Smart Cities, HealthTech — no matter what you do, your job is to solve meaningful problem for others.
That is REALLY important.
The way you build your business and the way you make real impact are by solving real problems.
Building a sustainable business means:
- You need a good market.
- You need a good product.
- You need good positioning.
But most people are already running the race for positioning without even knowing their customers need them to solve their specific problem.
In Webvan’s case: people didn’t need their problems solved, and they didn’t love the product. Their assumptions weren’t right, and they’d spent all their money finding that out.
So before you start running too far ahead of yourself, you need to find out:
- Who your customer is.
- What problem they need you to solve for them.
- Whether the customer agrees your solution solves their problem.
And I’m sorry to tell you, but all those reports and surveys won’t help you get anywhere close to this.
If there’s one thing I want you to take away from this article, it’s this:
“There are no facts inside the building.” — Steve Blank
My biggest problem currently, in general, is that the majority of entrepreneurs know this, but ignore it.
But, I understand.
Because let’s face it: interviewing customers is scary.
Getting it right
Tell you what: I always thought interviewing customers was a unique type of torment.
Even after having conducted 200 customer interviews, I’m still nervous when I start.
When I see other founders waver to interview customers, I feel them. Everyone who’s interviewed customers has. Interviewing is scary because:
- You’re going to have a conversation with someone unfamiliar. Cool.
- That someone doesn’t have the time, and resents being sold. Even cooler.
- That someone is probably going to kill your vision for the business. Excited yet?
During my first customer interviews, I couldn’t care less about the customer’s problem. The only thing that mattered was to get an answer to the following questions:
“We’re developing (solution). Would you use it?”
“How much do you think it’s worth?” / “How much would you pay for something that did X?”
Even though those sound like really helpful, they’re actually the most deceitful. I guess I’m not a natural interviewer.
Let’s put things straight
Regardless of my bad start, learning how to interview customers has become one of my most crucial skills.
Not because it helps me check out my ideas fast.
Not because it gives me an advantage over my competition.
And not because it helps both my personal life and professional.
It’s crucial because for me, interviewing customers makes the early stages fulfilling.
So I’m hearing you say:
“And what’s in it for them?”
Do you remember the last time someone else was asking you questions, being struly present with you, and understanding YOU?
It connects to one of our deepest human desires: to be understood.
When you get accustomed to interviewing, something switches.
You go from being scared about what your customer will think about your idea, to empathising and really getting to know another person.
By listening and asking questions, you are giving immense value.
All you have to do is listen. No pitching, no negotiating, just asking a bunch of questions.
Other people’s problems are interesting — when you’re in a position to solve them.
How to interview customers
Want to know what to ask during the interview? I wrote about that here.
The 30-Day Challenge
Given that your startup’s trajectory isn’t fixed, you have an amazing opportunity to put it on the right track.
All you have to do is consistently connect with your potential customer, dig into their problem, and help solve it in any way.
You can do this in the form of a 30-day chalenge.
What is your current idea about the problem you’re solving for them?
And how can you get in contact with 30 potential customers?
It could be adding them on LinkedIn.
That’s what I generally advice.
It could be going to a network event.
It could be asking people in a Facebook Group.
Whatever the way, try and speak with 30 potential customers in 30 days.
If you do this, I guarantee your trajectory will change.
Your path will become clearer.
Your added value will become clearer.
You’ll begin to identify new opportunities.
Will you invalidate your idea?
Wil you face a load of insecurity?
Will you want to quit?
But THIS is how you get to your startup’s success.
THIS is how you separate yourself from the masses.
Where will you be in 30 days from now?