Building a cool product is not enough
Building a cool product is not enough
Finding the right problem is more important than building the best product
You can view your startup as an optimisation machine. The world is already in a local equilibrium and you are trying to bring it down to a lower local optima. This means customers will have to go through a transition phase — that is the slump between the two local minimums — in which you are mostly a nuisance.
Think about it, clients have to first find you, understand what you do, try your product, onboard it, and work around its multiple limitations, just so that they can start to get value out of what you do. During this transition phase, the customer default inclination will be to want to go back to the previous state of affairs in which you didn’t exist because, at this point, you are just causing more problems than solving them. It’s not until you’ve crossed the crest of the slump that customers want to stick with you.
There’s a couple of ways you can mitigate this situation.
First, you find a problem so big that the slump between the two equilibrium points is almost flat. In this situation customers’ pain is such that they will put up with almost anything in order to get to a better state. These are typical of first-gen products in any new platform. Think sales before CRMs or music before streaming. If you are trying to replace a workflow that is currently done with Excel you are probably in this bucket. Most real
startups are in this scenario.
Second, you started a company in a competitive market with established solutions and fight with tooth and nails in order to get customers over the slump en masse. In this scenario product is almost a commodity, the baseline with which to compete, and you have to bring value via other means such as sales, marketing and customer support. In the long term every successful company finds itself in this scenario.
The worst deal is being a startup in the second scenario. You have a good product, maybe 3x better than the competition, but the size of the slump is such that you can’t manage to get enough customers to the new equilibrium, and you have no resources to compete in the other areas of value add.
At some point it’s better to stop and find gentler slopes to climb.
Real in the sense of a company that is growing +20% MoM.