4 Things Every Startup has to Prove to be Successful
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4 Things Every Startup has to Prove to be Successful

You have an idea, what’s next?

Once you come up with an idea, there are four types of proof an idea needs to become a successful business: 1. Prove there is a customer problem, 2. Prove the solution solves that customer problem, 3. Prove that customers will pay, and 4. Prove that the product creates value for the business.

Let me try to break that down for you.

1. Prove there is a customer problem

Just because you have an idea doesn’t mean that customers have a problem. You need to prove that customers have the problem for which you’ve come out with an idea. Most founders assume that the problem exists and go ahead with building the product without validating that assumption. That’s a huge mistake that founders make. Building something that nobody wants is consistently being cited as one of the top reasons why startups fail by various studies.

So how do you validate that customers have a problem? Talk to your potential customers. Your job here is not to validate your idea, in fact, the potential customers shouldn’t even know about your idea as it may bias you and the customer. Your job is to only understand the customer problem. And you should also avoid asking for potential solutions from customers. Customers know what their problems are, but they don’t know how to solve those problems. You aren’t allowed to tell the customers what their problem is, and in return, the customers aren’t allowed to tell you what to build. They own the problem, you own the solution.

2. Prove the solution solves that customers problem

After you prove that customers have a problem, you have to prove the solution solves that customer problem.

So how do you validate that your solution solves that problem? If you figure out what outcomes are your solutions providing and what pains are your solution eliminating or reducing for the customers, and see to that it matches with the outcomes and pains customers care about.

Once you do that, you achieve Problem-Solution Fit.

Tip: Don’t directly jump into building an MVP. Focusing on an MVP right away validates your assumptions, not the problems your customers actually face.

Here's a faster, cheaper, and more effective approach:

  1. PSF (Problem-Solution Fit): Use Jobs to be Done (JTBD) to understand the specific tasks your customers are trying to accomplish and the challenges they encounter.
  2. Value Proposition Canvas: Clearly define the value your solution offers by mapping customer needs and pains to the benefits you provide.

By following these steps, you'll gain a deeper understanding of your customers' problems and ensure your MVP truly addresses their needs.

3. Prove that the customers will pay

Just because customers have a problem, doesn’t mean that customers are willing to pay. Customers may have thousands of problems, most of they’ll crib and ignore. So is the problem you’re trying to solve big or annoying enough for the customers to pay for it?

So how do you prove that the customers are willing to pay for your product? You can’t do that be asking the customers. You do that by getting the actual product into the hands of the customers and ask them to pay for it and/or use it.

And when enough customers do that, you achieve Product-Market Fit.

4. Prove that the product creates value for the business

So far you were creating value for your customers, now you need to prove that the product can create value for the business.

Most startups feel that once they achieve PMF, they have succeeded. Any startup with a large pool of capital that burn cash to subsidise it products can artificially achieve Product-Market Fit, which only creates untenable customer expectation. That’s why startups even after achieving unicorn status fails.

So how do you prove that the product can create value for the business? You do that by building scalable and profitable business model.

Once you do that, you achieve Business Model Fit.

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