Like all new and experienced entrepreneurs, you are excited about your idea and love talking about it. You want your passion to show. However, there is a good chance that many of the contacts you make during the new venture process, will be looking for specific, well organized information about your concept. We feel that a good place to start is by being able to respond to four specific questions. Let’s take a look at each question.
What is the opportunity (The Problem)?
Being able to articulate what problem your venture is trying to solve is critical to developing a useful and valuable product and business. Many entrepreneurs as well as product developers find this difficult concept to apply. It seems much easier to speak about what your product or business does functionally rather than look at it from a problem-solving perspective.
However, it is important that you frame the opportunity through the lens of the problem that your venture will solve for the customer. Say for example, you want to create a business that helps homeowners organize their closets. You envision that the typical customer has a closet filled with piles upon piles of clothes on hangers, shelves, and the floor. With this mental image, you may think that the best way to solve this problem is a configurable, flexible shelving system that helps the customer place their clothes in an organized matter. Your assumption is that if you have more shelves, configured in a certain manner, the clothes on the floor will disappear. Your core assumption is that the customer will put the clothes on the shelves in an organized way if available. You build your solution around these assumptions and begin to create a business model around flexible shelving solutions.
However, what if the problem is that the customer does not have the time or inclination to fold clothes and place them on shelves. The problem is more about lack of time and less on space configuration. Then your solution may be different, one that does not involve folding or other time consuming activities.
How will your venture solve this problem (The Solution)?
Once you have identified the problem, you can now design a solution and business that solves the problem for the customer. Unfortunately, many an entrepreneur starts to build a product or service solution before they understand the problem. Looking at our closet organizing business, you can see that depending on how the problem is described has an impact on how you design a solution. If the disorganization of the customer’s closet is due to space limitations, your solution might focus how to use existing space more efficiently or find ways to expand the closet space in some way. However, if the problem is more about the time it takes to fold and organize the clothes, the solution will be different. Your business may focus on efficient methods to store clothes quickly, while still being organized. For example, maybe your business offers innovative hanger and hook systems, where the customer can quickly hang clothing items in a designated area.
Who experiences these problems primarily (The Customer)?
I cannot count the number of times I have heard an aspiring entrepreneur state that their product is for everyone. While in some cases, this might seem true, it doesn’t matter because to reach everyone is an impossible goal. Especially when you are starting a business with limited resources, you can’t possibly let “everyone” know about your business or provide enough products and services for entire populations. You need to focus on whom you will want to attract and hopefully sell to in the early stages of your business.
The main task is to identify which customers are most likely to be experiencing the problem you are trying to solve? Let’s get back to our closet organizing business. At first glance, it would be easy to say that this business is for anyone who owns or rents an apartment or home. After all, they probably all have at least one closet (and maybe much more). However, if you are targeting customers who are too busy to fold and organize their clothes everyday, you may want to target busy working urban professionals who own or rent smaller apartments and have a combination of limited space and time.
What key benefits will your customer derive if they use your products or services (Value to Customer)?
The last question has to to with your assumptions about how your solution will help and provide value to the customer. At this point, you should be thinking about how the customer assesses value in terms of such measures as time or cost savings or improved task performance. In our closet organizing business, we will want to know what outcomes are most important to the customer. In this case, maybe the customer is most interested in spending less time in storing their clothes at the end of the day or selecting what to wear for the next day. So you will want to understand how much time it currently takes to do these two tasks. Then, we can ascertain how much time the customer would prefer to spend on these tasks. You can actually measure the value desired. Your solution will need to save the customer X amount of time for it to be valuable.
Now that you have articulated your idea, you should assess whether this is a good venture idea for you PERSONALLY. Check Personal Discovery post as a starting point.