The more pitches I hear from startups the more I realize that entrepreneurs have a hard time figuring out if their startup is a painkiller or a vitamin. I mentioned this briefly in a previous idea screening post but I’d like to propose a method to help.
I’ve come up with five measures so far:
- Do you have a problem or a feature? – “Mobile access” is a feature, not a problem. E.g. I don’t really want mobile access to my tax return. A lot of startups have a feature idea at their core, not a pain point, mostly because the initial idea was created by an engineer.
- Do you have a specific target market? – A telltale sign of a feature looking for a problem is to target “everyone” or “small business”. Saying everyone needs your product doesn’t mean a trillion dollar opportunity. It just means you don’t understand the problem.
- Can you describe the person who will use your product? – How, where and when do they work? What are they doing exactly that causes them ‘pain’? What alternatives do they look for? Can you draw a picture before they use your app and after?
- Is the pain measurable? – Any convincing CEO can make you believe that bad UI is as painful as a root canal. But how do you measure it? Extra clicks? Time lost? Money lost due to errors? If you can’t measure the pain you have two problems: 1) you might be wrong and 2) you can’t tell if your solution is an improvement.
- Is it verifiable? – Sure, you may find some way to quantify pain but how do you verify with the people who matter, i.e. users? Have you identified ways to double check, like surveys, focus groups or one on one interviews?
So let’s look at an example:
|Problem or Feature?
||We create social networking tools for non-profits
||We help non-profits engage more volunteers and raise more money from funders, using social networking tools
|Clear market segment?
||Geographically-distributed non-profits with less than 10 staff whose target volunteer base is 18-35
|Detailed description of user?
||People who work at non-profits
||3 user types: 1) the Volunteer Coordinator & Fundraiser (who regularly communicates with volunteers and funders), 2) volunteers who network with the non-profit staff and other volunteers, 3) funders who don’t want to network but enjoy the profile they receive on the network
||All non-profits wish they reached more people
||We measure the # of volunteers needed each year to deliver programs minus turnover to calculate the total annual volunteer hours needed. There is often a deficit. We measure the annual budget deficit that needs to be covered by outside funding. We measure the opportunity cost of programs not delivered due to insufficient funding. If we’re successful, the # of volunteers, funders and programs goes up.
||We talked to a local non-profit and they loved our product
||We have identified a list of 25 non-profits in our target market. Within 30 days we could contact each one, ask them to complete a survey, and give us feedback on some screenshots of our product. If feedback is negative we will try other segments until we find the right one
Of course, having answers to the five questions doesn’t guarantee that you have a painkiller. It just makes it more obvious whether the pain you think you solve is really all that painful. Stated one way, the lack of a social network is no big deal for a non-profit. Stated another way, helping find volunteers and funders is a life-or-death part of how non-profits operate.
The main benefit of this process? Forcing you to spend more time digging into the problem. You may abandon your original problem but you may also find some legitimate pain points that are a lot more interesting to tackle.
Next time I’ll post a few more examples and analyses. Feel free to send me some examples from your startup.