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Strategy

What Is the Job To Be Done?

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People do not want a quarter-inch drill, they want a quarter inch hole.

– Theodore Levitt

A best practice for growth leaders and entrepreneurs who want to develop a successful new product or service is to first consider the job to be done.

Most innovators search for significant problems in defined markets, and then they think about possible solutions. This is a proven approach to achieving business growth. Unfortunately, many go about it the wrong way.

Here is the reason why: There is a natural bias to start the innovation process by improving existing products or relying on unproven assumptions without validating them first. This common mistake often results in innovations that buyers do not want or value (borrowing from above quote, this is creating an improved quarter-inch drill even though buyers are happy with their old drill). A dramatically better approach is to search for ways to help buyers improve how they want to do their jobs (for example, creating better quarter-inch holes, faster, cheaper!)

This focus on the “job to be done” is a subtle, but very powerful, shift in mindset for innovators. Moving from an inside-out perspective to an outside-in perspective does not always come naturally to growth leaders or entrepreneurs. Learning how to leverage this concept can accelerate your path to finding Product/Market Fit and company growth.

To understand what motivates people to act, you first must understand what it is they to need to get done. In a strategic planning context, you need to know the why behind the what.

Job To Be Done Theory

The late professor and business book author Clayton Christensen popularized the job-to-be-done (sometimes called JTBD for short) framework. His core theory: “People don’t simply buy products or services, they ‘hire’ them to make progress in specific circumstances.”

If the solution does the job well, buyers will “hire” it again. If it performs poorly, they will “fire” it and look for something else to solve the problem.

Christensen went on to write: “Innovation becomes much more predictable — and far more profitable — when it begins with a deep understanding of the job the customer is trying to get done.”

The implication of this shift in thinking can be profound. Growth leaders should stop focusing on their products and instead study the job that people are trying to do. By making the job, rather than the product or the customer, the focal point of your analysis you can create commercially successful products and achieve predictable growth.

Why Is This Approach So Useful?

Short answer: Because most new products and/or services fail.

Innovation has always been a top priority—and a big frustration—for growth leaders. For example, one McKinsey survey found that 84% of global executives reported that innovation was extremely important to their growth strategies. However, 94% were dissatisfied with their organizations’ innovation performance.

These numbers are staggering. How can this be? With the proliferation of technology, and the resulting ability to use it for generating customer insight data, companies today know more about their customers than ever before. Yet these insights seldom lead to better or more targeted innovations.

The hard truth is that the vast majority of innovations fall far short of ambitions. For many organizations, innovation is still an expensive and painful hit-or-miss exercise. Why? Many sellers are so focused on building customer profiles and trying to correlate vast data with behavior that they neglect to do something more important: simply understand why their customers make the choices they do. To create offerings that people truly want to buy, firms instead should focus on the job the customer is trying to get done.

Adopting this job-to-be-done approach can help improve your odds of success by providing actionable insights that lead to improved product or service offerings.

If you do the research to truly understand the “job” for which customers “hire” a product or service, you can more accurately develop solutions that align with what customers are already trying to accomplish. When you nail this, at a price point that is acceptable, you have a winning solution.

Applying the JTBD Methodology

In practice, the JTBD methodology is an useful refinement for the common approach of looking for a problem to solve. By focusing on the job-to-be-done, innovators can gain a much deeper understanding of all the customer’s needs and determine which are unmet.

It turns out that when customers are executing a job, they have a complex set of metrics in mind that they use to define the successful execution of their job. It is very helpful to capture these metrics (or desired outcomes) in the form of actionable customer need statements. This approach replaces the typical suggestions or satisfaction inputs companies ordinarily capture and use to create new products.

With this approach, the customer’s job to be done is translated into one or more uniquely structured statements that describes how customers measure value. When you think about it, creating a value statement is a perfectly logical first step in a process intended to create valued products and services.

Here is a simple 4-part template to follow: (Written from the buyer’s perspective)

  • When I…(provide context for the buyer’s challenge or problem),
  • But…(details on the barrier or obstacle that gets in their way or prevents success),
  • Help me…(this is the job to be done),
  • So I…(the value buyer will realize from the solution).

For example, using the drill/hole example from earlier, here is a JTBD statement: When I need a quarter inch hole for a project, but I don’t own an expensive professional drill, help me to quickly get a perfectly drilled quarter inch hole, so my project is finished quickly and looks great.

Here’s another example for a Peloton exercise bicycle: When I need an option to workout, but I can’t go to my favorite studio, help me to get a convenient and inspiring indoor workout, so I can feel my best for myself and my family.

A slightly simpler, alternative template:

  • When…(the situation),
  • I want to…(the motivation or forces),
  • So I can…(expected outcome).

Regardless of which template you use, a well-crafted JTBD statement creates clarity around a solution that does not exist today. Ultimately, you might end up with a number of these statements, each detailing a potential “job” your product or service could do. Growth leaders should prioritize them based on those with the highest market demand and largest market gap.

Conclusion

Anyone can build new products. (Well, almost anyone!) Not everyone can build products that solve a real problem and land product-market fit.

To better define the problem you are trying to create a solution for, think about the potential customer’s job to be done. This requires putting the customer hat on and looking at the world through their eyes. The JTBD framework will help you better understand customer behavior, and design better solutions as a result.

While conventional marketing focuses on market demographics or product attributes, JTBD theory goes beyond superficial categories to expose the functional, social, and emotional dimensions that explain why customers make the choices they do.

The JTBD approach reinforces something every growth strategist knows: intent matters. Everyone has reasons for the choices they make—a need to meet, desire to fulfill, objective in mind, some metric of success or completion! Successful products are borne from a deep understanding and solution for that intent.

People do not simply buy products or services; they have a “job” they are trying to get done. Understanding this leads to better innovation of new products and drives company growth.

The painful alternative is to invest time and money building products that nobody wants. You decide which is the better approach…

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

Knowing When to Pivot, Persevere, or Stop

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You’ve got to know when to hold ’em

Know when to fold ’em

Know when to walk away

And know when to run…

– Kenny Rogers, chorus from The Gambler

The concept of “making a pivot” has become popular to use when talking about business growth strategy, but I have found it is commonly misunderstood. Moreover, there is often confusion about when to consider it, and how to evaluate the alternatives.

This article will explore the meaning and purpose of making a pivot, and the two common alternatives of persevering, or stopping.

Defining Business Pivot

In some respects, business is like the game of poker. It is full of uncertainty, some things are in our control and others are not, we learn from experience, and there are multiple players all trying to win. Your strategy is how you choose to handle all of those elements in order to create a winning hand. Over time, expert players learn when to double-down, hold, fold and when to walk away to realize the greatest odds of success.

Poker is a great metaphor for the concept of “pivot or persevere,” which comes from Eric Ries classic book, The Lean Startup. His definition of a pivot is a change in strategy without a change in vision. In the book, he goes on to explain, a pivot is a “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”

It is important to note that while a pivot is a change in strategy, it does not necessarily need to be a complete change in direction. In fact, pivoting is often about looking at what has worked, and seeing how you can make refinements or refocus your efforts using those insights. As Ries notes, “keep one foot rooted in what we’ve learned so far, while making a fundamental change in strategy in order to seek even greater validated learning.”

Where Pivot Fits in Growth Strategy

The search for Product/Market Fit is a structured process where a growth leader gains validated learnings by sharing a minimum viable product with prospects and listening to the feedback.

How does this work in practice?

Growth leaders and company founders always have a vision. To achieve their vision they need to define a strategy and objectives to get there. Classic strategic planning theory dictates that the chosen strategy can change over time (or with new learnings from the market) but the vision should remain the same. When deciding to make a pivot, the target market or the value proposition (features and benefits) of the product or service might change, but the vision for the problem to solve does not. Each pivot creates a new set of assumptions and features to validate, and the process repeats.

The objective for each cycle of this process is for growth leaders and their teams to make a decision by asking a simple question: Should we pivot, persevere, or stop?

  • Pivot: If all the feedback is negative (or even worse, indifferent) and the data does not support the leap of faith assumptions, then it may be time to pivot. As the definition states, this means to try a different strategy in pursuit of the original vision.
  • Persevere: If each experimentation cycle seems to be more productive than the last, meaning there are lessons gained and the data supports the leap of faith assumptions, then the obvious next step is to persevere for another round of refinement.
  • Stop: In extreme cases, typically driven by complete failure to validate any of the leap of faith assumptions, or running out of cash to continue funding the search for Product/Market Fit, growth leaders or company founders may conclude there are no other pivots to make and it is time to stop. The decision to walk away is never easy, but sometimes is the only rational decision left.

The 10 Most Common Business Pivots

Just as every business and solution offering is different, so are the potential business pivots. However, there are some common themes. Here are the ten most common business pivots as highlighted in The Lean Startup book:

1. Zoom-in pivot

In this pivot, a single feature of your product becomes the whole product. This might be because one specific feature gets significantly more traction than the rest of your product. In these cases, channeling your resources into that feature alone can allow you to get your product onto the market much more quickly.

2. Zoom-out pivot

This pivot is the exact opposite of the first example: Your current product becomes a single feature of a bigger product. In this case, it means you have established that there is an interest in your product, but there is reason to believe that it needs to be a part of a larger, more developed product in order to be successful.

3. Customer segment pivot

Based on your field research, you conclude that your product should be targeting a different type of customer. This comes from discovering that your product interests a different audience to the one you were originally pushing it to. You might not need to change your product much at all – only your customer persona.

4. Customer need pivot

Your solution is refined based on a greater understanding, or new revelations, about your customer’s needs. Sometimes this pivot is driven by the discovery that the problem you’re solving is not important enough to your customers, or they are unwilling to pay for it.

5. Platform pivot

This pivot refers to a change from an application to a platform, or vice versa. Most often, startups that aspire to create a new platform begin their journey by creating a single application as the foundation.

6. Business architecture pivot

This pivot was inspired by concept that a business can either be high-margin/low-volume (complex systems model, common in B2B solutions with complex sales cycles), or low-margin/high-volume (volume operations model, common in B2C solutions). Some organizations choose to pivot by switching architectures.

7. Value capture pivot

This pivot reflects a change in the way you make money from your product. An example of this pivot would be changing how you charge by switching to a subscription business model from a sale-by-sale e-commerce model.

8. Engine of growth pivot

In this pivot, you make a change in your growth strategy in order to achieve faster or more profitable growth. Most startups use one of three primary growth engines: (1) Viral growth, when current users recommend other users. (2) Paid growth, when you spend marketing budget on acquiring new customers. (3) And sticky growth, which is focused on customer retention and maintaining a low churn rate. In this pivot, you decide to change from one of these growth engines to another.

9. Channel pivot

In the Channel pivot, you change how and where you sell your products and/or services (for example, in stores, online, through partners, in-app, etc.) This pivot is typically in response to the learning that the same solution can be delivered more effectively through a different channel. In many cases, this will drive changes in the price, features, and competitive landscape of a product.

10. Technology pivot

In this pivot, you decided to change the technology that your project is built upon. This is often a result of learning you can achieve the same outcome with a different lower cost and/or better performing technology.

As you can see from these ten examples, business pivots can take many forms. Which pivot you choose will ultimately be driven by what you have learned from your market experiments.

The bigger challenge for growth leaders is determining when to pivot.

To Pivot, or Not to Pivot?

Deciding whether to pivot, persevere, or walk away is one of the classic entrepreneurial dilemmas. It is one of the most difficult decisions any growth leader, or company founder, will ever have to make.

Asking the honest question of “should we make a pivot?” is sometimes painful, but always important.

Making the pivot decision can be very stressful and difficult for teams to evaluate. To avoid the trauma, many growth leaders and company founders wait too long to consider a pivot, sometimes with dire consequences.

One easy way to avoid this “fire drill” is to schedule regular Pivot/Persevere decision-making meetings in advance. A best practice suggestion is to do this no more frequently than once a month, but not any less frequently than once a quarter.

The agenda for this meeting is simple: Ask yourself, and your team, what evidence do you have that your current strategy is getting you closer to achieving your vision? Are you making sufficient progress to believe that your original strategic hypothesis is correct, or do you need to make a major change?

If your product experiments are helping you make progress towards validating leap of faith assumptions, and the feedback you are receiving is resulting in material improvements to the product offering, then it makes sense to continue.

If there is no evidence of making progress, or it is insufficient, then a pivot may very well be the best course of action. In the words of Eric Ries, “If we’re not moving the drivers of our business model, we’re not making progress. That becomes a sure sign that it’s time to pivot.”

Sometimes all you need is more patience, additional capital, or a larger audience. Other times, you might need to make a strategy change. In these scenarios, you might have the right product but you are targeting the wrong customers, it’s too expensive, lacks essential features, or doesn’t solve the right problem. This is when you pivot, or if you cannot see any viable path forward, you choose to stop and walk away.

Danger Zone for Growth Leaders

There may be no bigger destroyer of creative potential or financial capital than the misguided decision to persevere in the face of negative or neutral market feedback.

Instead of pivoting, or walking away, some growth leaders are tempted to stay on course and try to power through the obstacles. By refusing to make a decision, or embrace market feedback, they run the risk running in neutral. This is a dire situation where they are neither growing enough nor dying – just consuming scarce human and financial capital, but not making progress.

Growth leaders and their teams should take comfort in the realization that failure is a prerequisite for learning. In this context, making successful pivots will put them on the path towards a commercially viable solution offering.

This is the reason that many successful entrepreneurs and corporate growth leaders who have decided to make a pivot will tell you that their only regret was not making the decision earlier and quicker!

Conclusion

If growth leaders take only one lesson from the economic turmoil of the last 24 months, it is that we are living in complex VUCA business environment. The best path forward is to develop a growth strategy, and then move quickly to execute it. This market-facing activity will sometimes result in the need to re-evaluate the plan.

The decision of whether to pivot, persevere, or stop challenges every growth leader and business founder at some point. Making a good decision regarding whether or not to pivot your business strategy can be the critical difference between success and failure.

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

Finding Product/Market Fit

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The only thing that matters is getting to Product/Market Fit, which means being in a good market with a product that can satisfy that market.

– Marc Andreessen

When developing a new product or service, growth leaders are ultimately searching for the condition that venture capitalists like to call Product/Market Fit (or PMF for short). It is the ideal situation where you have identified the solution to a significant problem in a defined market and validated that prospects are willing to pay for it.

Product/Market Fit is the ultimate objective for entrepreneurs in startups and for growth leaders of more established companies. From this starting place, they can commercially develop their solution, build the go-to-market program and team, and begin scaling the business.

Investing in any scale-up or growth effort without having found Product/Market Fit is a guaranteed path to failure. Finding it is not easy, but it is vital.

In fact, many growth strategists (this one included) believe Product/Market Fit is the best predictor of future success for a company.

Definition of Product/Market Fit

There is some interesting venture capitalist history behind the creation of the Product/Market Fit concept.

The classic definition is the degree to which a product satisfies a strong market demand. Product/market fit has been identified as a first step to building a successful venture in which the company meets early adopters, gathers feedback and gauges interest in its product.

The Process to Find Product/Market Fit

While finding Product/Market Fit is not always simple, it is easier if you follow a proven process. The basic formula is: Develop a hypothesis. Test it. Observe/learn. Continue or Pivot. Iterate.

The best way to test, learn and gain market validation is to share an actual prototype with potential buyers, what is often called a Minimum Viable Product (or, MVP for short).

The process looks like this:

  1. Determine your target customer. Who is the buyer, and what does the market look like?
  2. Identify underserved customer needs. What is the problem you expect the product or service to solve?
  3. Define your value proposition. Why should they buy it?
  4. Specify your Minimum Viable Product (MVP) feature set. What do you need to share with potential buyers in order for them to evaluate your solution and provide feedback?
  5. Create your initial MVP prototype. Designed to test your most critical assumptions first.
  6. Test your MVP with customers. Observe and listen to test your hypotheses.
  7. Continue to iterate, or pivot. Based on the feedback you receive, make the decision to continue refining the MVP, decide you are ready to go to market, or pivot in a new direction.

Here’s what it looks like in practice: Growth leaders must first identify a significant problem and a target customer profile. Then they must get out of the building and have conversations with real life prospects to validate their key assumptions. Based on what they learn they refine their solution, fine tune the value proposition, and repeat the process until they either arrive at a winning solution or change directions.

This validated learning process is challenging, but not impossible. Ultimately, it leads to great outcomes because it provides growth leaders with the confidence and insight to define the solution and a market, so that there is no guessing when it comes time to build or sell.

Business strategists will recognize and appreciate this measured approach as a great risk mitigation strategy. It allows you to learn quickly as you move towards your objective while limiting your downside exposure.

Which Comes First, Product or Market?

The number one reason why startups fail is that there is “no market need” for the product or service they are offering. It is hard to believe, but this reason for failure even ranks ahead of running out of money. It is for this exact reason that finding Product/Market Fit is so important.

Many growth leaders wonder which element is more important to validate first, product or market?

The quick answer is: Market.

Here’s why…

According to Marc Andreessen, “product/market fit means being in a good market with a product that can satisfy that market.” Unfortunately, in many cases the focus is too much on the latter part of the sentence (a product that can satisfy the market) and not enough on the former (in a good market).

Market matters the most. Andreessen went on to explain why that is the case: “You can obviously screw up a great market — and that has been done, and not infrequently — but assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure.”

That is also why time spent building a business around the product alone is pointless: “In a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter – you’re going to fail. You’ll break your pick for years trying to find customers who don’t exist for your marvelous product, and your wonderful team will eventually get demoralized and quit, and your startup will die.”

You can have the best product or service in the world, but if there is no market, there is no business.

Market wins. Always.

Two Key Hypotheses to Validate

As growth leaders and their teams are iterating their MVP in the market, they should focus their research on validating two key hypotheses:

  • A “value” hypothesis – to test what solution will delight customers enough to buy. The process of developing and testing your MVP will help you define the ideal combination of features and benefits to include in your offering, the value proposition for customers, and the best way to articulate them in your marketing.
  • A “growth” hypothesis – to test how to get more customers and scale the business. Your field research will help you to refine your targeting and develop a clear profile for an ideal client, the buyer personas you will sell to, and how best to reach them.

Validation of these two hypotheses reinforces the lesson that “market” comes first and then the product comes second. Your solution offering (your product or service) is intended for a market, and the market will confirm what to create by the interest of potential customers and their willingness to buy.

Leverage the 40% Rule

Searching for Product/Market Fit can often be a long and complicated journey, with many detours and dead ends. It is seldom a straight line.

Growth leaders should remember that it is more about the journey than the destination. Why? Because it is often not clear, or completely obvious, when you have found it. Unfortunately, Product/Market Fit is not a binary state; it is more a matter of degrees. You should be looking for more than the minimum degree of fit, ideally finding a high degree of Product/Market Fit.

One proven way to validate that you have found an acceptable level of PMF is to survey potential buyers and apply the 40% Rule. If you find that at least 40% of surveyed prospects indicate that they would be “very disappointed” if they no longer have access to your particular product or service, then you are in a good spot.

An alternative way to structure the question is to ask if surveyed buyers consider the product or service a “must have.” Again, if more than 40% respond positively, then you are looking good for PMF.

Avoid This Common Mistake

One mistake many growth leaders make is to confuse Product/Market Fit with problem/solution fit. This sounds a bit confusing, but it is actually simple.

You need to be very careful that you are measuring desire for your product or service (the MVP you are testing) and not just the desire for any solution. This can be easy to misinterpret if you are not careful in your validation testing. Many buyers will express enthusiasm for a solution to a problem, but not necessarily the one you are proposing at the price-point you need to be profitable. This can create a dangerous “false-positive” metric for validating PMF.

Conclusion – What Comes Next?

Product/Market Fit is often considered the best predictor of future success for an organization. It is a prerequisite for sustainable growth, because it represents alignment between supply and demand, and when you achieve it, you have the foundation for growth.

This makes a lot of sense when you consider that without validating PMF you may invest a lot of time and money into developing a product or service that nobody will buy.

After achieving Product/Market Fit, the next step is to scale the business by finding more customers within the target market.

Time for a growth strategy and plan!

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

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Validate Your Leap of Faith Assumptions

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Leap of faith assumptions are the real power of entrepreneurs because the entire venture depends on it. If they are true, then great opportunity awaits. If they are false, the start-up/business risks total failure. 

– Eric Ries (author of The Lean Startup)

Many organizations choose to invest their scarce time and resources developing new products and/or services without having first validated that there is a market.

One frequent cause for this is the solution looking for a problem syndrome, where startups or more established companies neglect to fully understand or verify the problem first.

Without realizing it, the growth leaders of these organizations have made what is often called a “leap of faith assumption” that is, they have assumed there are ready and willing buyers for their offering.

Logic and common sense tell us that it would be very smart to verify this assumption before investing in building a solution.

Unfortunately, common sense is not always common practice!

There are several related common leap of faith assumptions made by company growth leaders. In this article, I will share what these strategic traps are and offer some guidance on how to avoid them.

Let’s get started…

Defining Leap of Faith Assumption

Every good strategic plan begins with a set of assumptions. After defining these assumptions, growth leaders next develop a strategy that uses those assumptions as a foundational starting point and build a plan around them that will achieve the organization’s objectives.

In general, you can categorize assumptions into two buckets:

  • Technical – assumptions you make about topics like usability, construction, efficiency, and reliability of your product or service.
  • Commercial – assumptions you make about topics like what prospects want, how you will market, sales channels, and customer success.

The goal for growth leaders is to test their assumptions as quickly as possible. For most assumptions, this is not that difficult. In fact, some assumptions can be validated from past experience or simple deduction based on accepted facts. For example, people need to eat food to live, or companies need to sell their services to grow.

Other assumptions, often related to functional details of the proposed product or service, require field-testing with prospects. This will be a topic for a future article.

In the world of startup and growth strategy there is a special subset of assumptions that are more challenging. These assumptions are so fundamental, that the success of the entire business rests on them. If they are true, tremendous opportunity awaits the company. If they are false, the company risks failure. Because they are unknown and highly risky, they are often called “leap of faith” assumptions.

Eric Ries popularized the leap of faith assumption concept in his book, The Lean Startup.

Note: Don’t be misled by the title of the book – the principles apply to any size or maturity of organization. In fact, his definition of a “startup” is: A human institution designed to create a new product or service under conditions of extreme uncertainty. This definition purposely does not include anything about company size, industry, or sector of the economy. It applies to any organization.

Growth leaders need to recognize that leap of faith assumptions are the riskiest elements of their strategic growth plans. They are also more difficult to validate, therefore there is a temptation to take them for granted, or simply gamble that they are right and not wrong.

Many startups and more mature companies have failed because they did not prioritize and properly validate their leap of faith assumptions first.

Critical Leap of Faith Assumptions

Growth leaders must try to validate as many of their assumptions as possible before they invest in developing a new solution to a problem. However, the critical assumptions, the ones we call leap of faith assumptions, should be the priority.

Leap of faith assumptions most often focus on the demand side of the equation. Why is this the case? Because if there is no demand, then there is no sale, and if there is no sale, then there is no business opportunity.

In my experience, here are the three most critical leap of faith assumptions that startup founders and established company growth leaders make:

  • The ultimate “leap of faith” assumption – is that prospects actually want the proposed solution. Making sure there is market demand is critical. If you solve a problem that people want to fix that is great news.
  • The next is – prospects recognize they have the problem. Or, are they living in ignorant bliss? This is not necessarily a showstopper, but if prospects don’t know they have the problem it means your marketing and sales process will be more complicated because you will have to educate on the problem and then the solution.
  • The third is – prospects are willing to pay for a solution. If people recognize they have a problem and want your solution, will they pay for it? This should be obvious – it is extremely hard to build a business model around a solution that nobody will pay for!

Validating Your Leap of Faith Assumptions

The Lean Startup Methodology pioneered by Steve Blank and optimized by Eric Ries was designed to help growth leaders quickly identify their critical leap of faith assumptions so that they can test them out on potential customers. Then they can decide whether to stay the course (continue validating and begin developing the solution) or change directions (pivot). A future article will cover this process in greater detail.

Discovery can only happen when growth leaders get out of the building and talk to real live prospects in the marketplace. Only then can you learn if potential future customers have a significant problem worth solving.

How do you do this? – By asking and getting answers to deeper questions like:

  • Do people really have the problem you think they have?
  • How do they describe the problem?
  • How do they address the problem today?
  • Is your concept a better alternative for them?
  • What is solving the problem worth?
  • What is the cost of inaction?
  • Where would they search for a solution?
  • How would they like to buy?
  • Where would you find more customer like them?

One proven strategy for growth leaders is to identify and prioritize their most risky assumptions to tackle first. Why? Those assumptions that are scary or make us uncomfortable are also the easiest to push aside. It is human nature to embrace what is familiar and safe, just as it is to avoid risk and the unfamiliar. Focus first on the leap of faith assumptions that have a high level of importance for project success along with a short duration of time to test.

Conclusion

Just because you “can” create a new solution is not a good enough reason. The real question is “should you?” – This can only be answered by determining that it is a solution to a problem that people want to solve and will pay for.

Before starting to create a new product and/or service, growth leaders must ensure they can positively answer critical leap of faith assumptions around demand for their proposed new product or service. A positive response will provide greater clarity and confidence to proceed.

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

How to Avoid Being a Solution Looking for a Problem

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“If the only tool you have is a hammer, you tend to see every problem as a nail.”

– Abraham Maslow

The single biggest reason for startup failure is “no market need” – I like to call this the “solution looking for a problem” syndrome.

Unfortunately, this scenario is extremely common in startups. It is also common to find it in more established organizations.

Why does it happen? Entrepreneurial solution creators get so excited and passionate about their new product and/or service innovation that they gloss over a fundamental requirement for business success: To be viable your offering must address a real problem in the market that buyers actually want to solve.

The key takeaway for business growth leaders is to avoid falling in love with your offering until you have validated there is a market for it. To build and grow a successful business, you have to make something that people actually want to buy.

Growth leaders that ignore this wisdom will end up spending a lot of time and money trying to sell something that nobody will pay for. This can have fatal ramifications for a career, and an organization.

While the solution is simple, it is not always easy to do.

Start here…

First Identify Potential Problems to Solve

“It isn’t that they cannot find the solution. It is that they cannot see the problem.”

– G.K Chesterton

Begin your solution discovery journey by putting a customer hat on. Think deeply about significant problems that need solving.

This research exercise should be heavily influenced by your personal and professional life experiences. Your background and history can be a powerful lens through which to view the world.

For B2B problems, it is often much easier to focus in on a specific industry vertical or functional area. Ideally, one that you know intimately. For B2C problems, think about a specific demographic or consumer profile to get started.

When you identify a potential problem to solve, a pain to eliminate, or some meaningful metric that your future market would like to improve then you are ready to begin thinking about solutions.

But first, it is absolutely vital that you get feedback on the problem you have identified and confirmation from actual prospects that they care about a potential solution.

Here’s how…

Validate the Problem with Real Live Prospects

“You can increase your problem-solving skills by honing your question-asking ability.”

– Michael J. Gelb

At this stage, armed with a hypothesis of a problem, many startup founders start building their new product and/or service. This is a big mistake. Why? You simply do not know enough yet. Before doing any development work you need to get out of the building and talk to real live prospects in the market.

The smartest way to validate your problem-to-solve is to talk to at least 20 (preferably more) potential customers. You need to validate your hypothesis of the problem that you think they are experiencing.

Your goal is to get a better understanding of how they articulate the problem. What are their pain points? What is their desired outcome? What must the solution include? What is a solution worth to them personally? To their organizations?

These interviews must be done with real potential buyers who are experiencing the problem you want to solve. Even more importantly, these must be prospects who can make a purchase decision. For example interviewing a sales rep about a potential productivity tool might yield a positive response, but they are not your buyer…you need to validate with their sales manager, the one who has a budget and the ability to actually buy a sales productivity tool.

Why should you push for a least 20 interviews? Because you will learn and refine your problem hypothesis as you go.

  • The first three interviews (numbers 1-to-3) will help you understand and refine the problem statement. You will learn how to articulate it in the buyer’s language. You will also learn what questions to ask. While you might think you understand it, you are biased to the seller’s point of view, not the buyer’s. These first interviews will give you a much richer understanding of the problem from the buyer’s perspective.
  • The next seven interviews (numbers 4-to-10) will confirm the patterns and observations you made in the first round. You learn how to define the problem from the first three interviews and confirm your learnings in the second set of seven.
  • The next ten interviews (numbers 11-to-20) will provide you with a much deeper viewpoint on the problem, and help you to narrow in on the most impactful parts. This is where you will begin to nail your pitch, and where you will start to form a strong thesis around the eventual solution. For style points you can interview people from different sizes of organization, or tangential industries to your target, to gain a broader perspective on the problem.

One important caveat with your interviews: make sure these are conducted with actual potential customers. While it might be easier to interview your friends or people you know, they won’t give you the unvarnished truth that you need.

Talk to prospects who you don’t know, and who don’t know you.

And pay attention to what you hear…

Listen Carefully to Identify the Right Problem

“Solving problems means listening.”

– Richard Branson

While this buyer interviewing process is an exceptional learning opportunity, it can also be painful. You might not get positive feedback, or you might receive conflicting signals about the actual problem. Worst case, you get indifference…which means there is not a lot of energy around the problem or a solution.

Indifference is the kiss of death. What you are seeking is loud confirmation, or strong resistance.

Regardless of whether the feedback is positive, negative, or mediocre – the most important thing is to pay attention. Listen to what the potential buyers are telling you. It is much easier to make changes to your assumptions and plans at this early stage than it is later down the road after you have invested a lot of time and money to create a solution for a problem nobody cares about.

Based on your interviews you should now be able to answer some important questions:

  • Do people really have the problem you think they have?
  • How do they describe it?
  • How do they approach the problem today?
  • Is your concept a better alternative for them?
  • What is solving the problem worth?

“We fail more often because we solve the wrong problem than because we get the wrong solution to the right problem.”

– Russell L. Ackoff

At this point, assuming the feedback was mostly positive and you have validated the problem, you in a great position to begin to think about potential solutions.

Solutioning Mode

“We cannot solve our problems with the same thinking we used when we created them.”

– Albert Einstein

Perhaps the single most important piece of advice for entrepreneurs and growth leaders who want to avoid being a solution looking for a problem is this:

Fall in love with the problem first, not your proposed solution.

This mindset shift is so powerful because solutions may shift and morph over time, but problems are usually more enduring. There are many benefits to starting with a validated problem:

  • When you start with a validated problem, you have the flexibility to create multiple solutions.
  • When you start with a validated problem, you avoid falling in love with every one of your ideas, even the bad ones!
  • When you start with a validated problem, you will naturally gravitate to the solution that best solves the problem, and that buyers will pay you for.
  • When you start with a validated problem, you are not constrained by a pre-formed solution, you have the opportunity to truly innovate.

Be the Solution to a Significant Problem

“Giving up is the most painful way of solving a problem.”

-Anonymous

Validating a market problem is not always easy, but it is always worthwhile.

The investment you and your team make in developing a deep understanding of the customer challenge will pay off in spades. Not only will it result in a solution that customers will pay for, but you will also develop a much deeper understanding of how to sell to them, and how to service them once they do become your customer.

Instead of being a solution looking for a problem, search out significant problems, understand them inside and out, and then create a compelling solution to sell.

Pretty simple, right?!

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.