It Doesn’t Have to be Sexy, It Just has to Solve a Problem
In this pod episode, Ryan Fyfe and I talk about a ton of really cool endeavors he’s been involved with.
He’s had several BIG successes in his entrepreneur career and his advice is absolutely worth exploring once you finish this read.
In this post, we’re going to dive into the specifics as it relates to validating your business idea but before we even take one step further, let’s get one thing very clear…
…It’s not about how sexy or cute your idea is.
In fact, I’ve been involved with some of the most cutting edge startups you could imagine.
Most recently, I currently serve as an Advisor for a neuroscience startup.
This company can literally glean information from your brain and body signals to derive meaningful marketing data.
If I showed you a commercial while you were strapped up to their biometric tools, I could literally tell you if you liked the commercial or not, which elements you liked or disliked, the intensity by which you felt about it and the exact moments you had each of these responses.
So, imagine this…
…Coca-Cola intends to spend $100MM+ on a new initiative but our data confirms the majorioty of users are not responding postively at a neurological level.
In so doing, we save Coke $100MM by preventing the fire before it happens.
Sounds like a surefire win, right?
Like a “where do I open my checkbook,” play.
Well, we certainly thought so.
And we even got a meeting with that big company that sells brown sugar water.
At the end of the day, they opted to stick with their current methodologies and bypass our solution.
Now, could we have done a better job conveying our solution?
Could we have just had bad timing and need to continue pursuing these opportunities?
But I’ve never once in business gotten so many face-to-face requests that didn’t come to fruition.
And at the end of the day, our solution, when matched against the price of the current solutions, just wasn’t enough to tip the scales.
Our futuristic way of acquiring this data may have come across as a little too invasive for their liking…
Words like manipulation came up as objections.
When in fact we’re just reading data, not planting ideas in people’s minds.
But that’s neither here nor there.
Bottom line is we were a bit too far ahead of our time and largely the only people utilizing these solutions operate in some capacity in academia.
The day will come when this form of Market Research IS the solution but it’s not right now.
And that’s where the valuable lesson comes into play.
Because we spent months putting this together but we made one critical mistake.
We assumed it was a no-brainer before we sunk our teeth into it and analyzed if our market felt the same way.
We spent over a year trying to cram a square peg through a round hole.
When what we should have done is have some preliminary discussions before anyone even thought of the word “GO.”
Startups Don’t Work When You Don’t Do Your Homework…
I serve as an Entrepreneur in Residence for a Silicon Valley based, Idea Accelerator Program, called Founder Institute.
In this program, one of the very first things we do is challenge our aspiring founders to get out and have 500 conversations with potential customers.
From those conversations, it’s like they’ll be able to prove whether or not the idea is viable and worthy of pursuit.
We start with 250 applicants and accept ~50 students…we end up graduating about 7-10.
Of those 7-10, we know eight will still be in business in five years and two will go on to raise substantial funding and/or successfully exit.
But the reason, in many cases, we start with so many people and then only graduate a handful is because people often times just fall in love with the idea.
That, or they love the idea of entrepreneurship but once they see what it actually takes they quickly lose interest and drop the program.
To go a step further, I would say nearly ALL of the students we graduate have an acute understanding of their industry.
They’ve either worked in the space for someone else, grew up around this particular industry or had some unique experience that lent them a deep understanding of people’s wants, needs and desires in that space.
Very rarely do I see someone just wake up in the middle of the night with this idea and then turn it into a billion dollar concept.
**Side note: this is why I WILL NOT sign an NDA. For one, they are highly ineffective and secondly, the idea is trash until the right person comes along to make it happen. If you are so foolish as to think an idea can just be spawned into existence, that’s not a relationship I want to build anyways.
Your idea, if it’s a worthwhile pursuit, likely has been brewing for years.
That, or you have some uniqueness about who you are as it qualifies you for the pursuit.
So, in order to validate your business idea, let’s first examine who YOU are now that we’re determining that as the relevant origin point.
What do you do now and how is that space lacking?
Do you have a job and you’re constantly criticizing the ways in which things are done?
Or maybe you just see an entirely new opportunity in the space.
For example, maybe you work for a Blockbuster type of a company and realize a Netflix-type platform is the wave of the future.
Often times, the industry is just waiting for disruption and with the advent of the internet, it was so obvious Blockbuster was destined to fall if they didn’t change and/or acquess.
It’s the same reason retailers are getting whooped up the block by Amazon right now.
So, that’s first…analyze your experience to derive an opportunity.
Next we want to analyze your skill set.
Zuck wouldn’t have gotten far without his ability to code and eventually create what we now know as Facebook.
I’m not saying it’s a MUST that you have these skills.
In fact, there are many entrepreneurs that do not have the trade skills.
Steve Jobs is probably the most notable example of that.
So, would you need a Woz or can you get a BETA off the ground on your own.
At the end of the day, the trade skills aren’t nearly as important as understanding the opportunity and deep knowledge of the space.
You can find yourself the necessary counterpart…
…it’s more challenging, but certainly not impossible.
Now We Want to ASK!
Henry Ford said if he had asked his customer what they wanted they would have said a faster horse.
So the key to your ask if how you frame it.
And that starts by being specific.
This will really help you if you do indeed have a deep understanding of the industry you intend to play in.
In that case, your questions are going to be more about the difference in solutions and not general, high-level questions.
Here’s an example of what I mean by that:
Let’s go back to the Henry Ford example.
The problem with Ford’s answer starts with his questioning.
What his customers really wanted was faster transportation but that’s not their job to have the vision of this new solution.
That said, if he had asked something like “do you find it limiting to only have one passenger on your horse?”
Or “would you be interested in a transportation alternative that didn’t require being fed?”
Maybe you position the question about having a climate controlled environment.
See the difference?
We’re asking specific questions…
Not just “what do you want?”
And so your job is going to revolve around crafting the right questions and not just running around aimlessly chatting with people.
I see this far too often.
The other mistake I see quite frequently is people asking the right questions but then failing to listen properly.
They can’t handle people being critical about their ideas.
This idea has become their baby and any objection is a direct insult to them.
However, if you’re wise enough, you’re going to use those objections as an opportunity to not only further tweak your framing in the future but then craft your entire marketing message around that.
Here’s an example of what I mean by that:
Let’s say you’re trying to sell a weight loss supplement that you claim can help people shed those extra pounds without having to change their diet or exercise more than they currently do.
Now let’s say some of the responses you’re receiving are negative because people have gotten wise to what they put in their bodies.
They heard about the people that died because of chemicals like ephedra that are now banned.
Your natural inclination is going to be to interrupt them and exclaim how your product is 100% natural ingredients, etc., etc.
When in reality, your response should be to let them fully finish their line of thinking and then proceed to validate the objection.
Something like “are natural ingredients important to you and how aware are you about the things you put into your body?”
Because what we’re now doing is validating not just the idea here but we’re also working on defining your customer avatar.
From that question, rather than go into sales pitch mode, we can now learn more about the person in which we’re speaking to.
They may respond and say they really don’t pay much attention to what they put in their body but they saw something on the news about ephedra.
Or they may say they are extremely health conscious and are always reading the back of labels.
As you can imagine, that’s a massive fork in the road in terms of how you would proceed forward.
But most of us never get this far.
Because we either haven’t taken the time to have these meaningful conversations or we’re too in love with the idea for anyone to have an objection.
I see both mistake equally and often times at simultaneously.
You’re an Investigator, Not a Salesman
You need to PROVE these thing is worth pursuing, not sell yourself on doing it.
As an essentialist, my first reaction is always no, not yes.
And that may sound counter-intuitive to you at first.
But even when I have an idea that I know fills an underserved market, I’m STILL poking holes in the concept.
It’s not because I’m a masochist.
It’s because I want to first distance myself from falling in love and view it objectively but then I want to make sure I have the absolute BEST vision of what this thing needs to become.
I’m taking the information I received from my deep dive conversations and I’m now figuring out the best and most scalable way I can present this.
What are my challenges going to be?
What is this idea going to require?
Will I need funding?
If I need funding, how can I figure out how much?
And lastly, is this a business idea I actually want to dedicate all of my time and effort to for the foreseeable future.
Too many entrepreneurs go in with only the best case scenario in mind and with the exit in sight.
I’m not saying having an exit strategy is not important.
But if all you’re doing this for is the upside of a successful exit, you’re doing it for the wrong reasons.
I like to plan for things to take twice as long as I think and cost twice as much as I’ve planned.
If I’m still excited about it and there’s still something in my soul that wants to make this thing a reality, then I’m all in.
Because that’s what it’s going to take…being all in.
And I’ve never seen someone half ass a successful startup.
Nor do I think I ever will.
And it’s okay to admit to yourself this idea just isn’t what I thought it would be or I’m just not all that excited about it to not pursue other things.
We all know the type.
The person that has a new business idea every other week and you never take them seriously because…well, how could you?
And that leads to my final point on validating your business idea.
YOU are What Validates the Business Model
I bet on jockees, not horses.
You show me an entrepreneur that is hellbent on delivering value to the world and I’ll bet on that person way before the “great idea.”
Even if it’s a service play.
And that’s largely been my story.
I’ve been in businesses that I wasn’t all in with.
But when I am, look out!
There’s nothing that’s going to stop me from success.
And that’s why I built a seven figure, service based business from my college apartment.
It’s also why my online business has erupted in an even more staggering manner.
When I’m aligned with the idea and what it requires, there’s nothing that’s going to stop me.
I can screw up and not have my ducks in a row.
Not interview my target customers…
And not have any experience in the field I aim to serve.
When all else fails, I bet on me when the pursuit is meaningful to me.
Now, the idea may evolve and I end up serving in ways I didn’t previously anticipate.
But the pursuit of the idea, at a high level, always remained the same.
YOU are the validation.
YOU are what’s going to make this thing work or not work.
And YOU need to decide if this is the right time, place and play for this season of your life for all systems to be a go.
You get those right and I’ll stand back to watch you set the world on fire.
Don’t forget to also listen to the pod!
Ryan Fyfe, Entrepreneur/Investor & Blockchain Enthusiast, drops by the pod to talk how to validate business idea or startup concept and when and how you should approach funding.
Today’s Sponsor: Onnit
To learn more about Ryan, visit Workchain.io