In The Goal, after a few awkward conversations Alex Togo, a manager of a plant about to be shut down, is asked one question by his advisor Jonah: what is the goal of your company? Alex, unsure about the obviousness of the answer he's about to give, hesitates -- then blurts out:
"The goal of a manufacturing organization is to make money."
Let's be honest here. If that was the initial goal of your startup, you would fail. There is a difference between being an established business and operating under the uncertainty of a novel product idea.
In the previous post, we talked about focusing on the problem. Let's say, you followed this advice: you took a step back and reflected on the problem you were trying to solve. Now you’re reading blog posts after blog posts in the hope of never making any mistake again.
But, what could be worse than spending an inordinate amount of time working on a solution that solves no problem? Inertia.
Inertia often creeps up after spending too much time on the internet reading conflicting advice for new startup founders:
“Talk to users before writing the first line of code”
“Write code and talk to users”
“Don’t pay attention to the competition”
“Position yourself well to attract new users”
The truth is that no matter how much you think about a particular problem, you're going to need to act. But if money is not your goal, then what is?
You’ll need to find out if this problem exists. Sometimes, you’ll be required to build the full app first, but more often than not, you’ll be able to talk with potential customers. These early conversations should serve you as a guide as not only if you should build something but also what should be built.
Finding out if things exist has long been part of science and it should come to no surprise that we’ll be using something that loosely resembles the scientific methodology to [in]validate our assumptions. We’ll formulate a hypothesis that needs to contain the following:
A target audience
A list of feature that solves the problem
Metrics to follow (used as an indicator of success)
A timeframe to enact the experiment
In practice, it’ll often look something like this:
“If InvesX contains pie charts and a way to enter data, we will get 50 daily active users [who struggle to keep track of their investment] within the first two months of launching the app.”
Seems easy enough, but don’t get fooled.
First, this doesn’t answer how you’ll get to your goal, just the broad lines of the experiment. Second, it doesn’t acknowledge several underlying assumptions: Is there even anyone who struggles to keep track of their investment? You’ll have to pinpoint the riskiest assumptions and tackle them first.
Riskiest of all might be about the assumed users. Does anyone even care that you’re solving their problem? Are they happy with their life as-is? Would they be ready to pay any amount of money to simplify that specific part of their life? You don’t know.
Here again, you’ll be able to use a hypothesis as a north star:
If there are people who struggle to keep track of their investment. I will be able to talk with at least 10 of them in the next couple of weeks.
It might seem like you’re getting nowhere, but as an entrepreneur, you’ll be in constant search for the truth. Going down rabbit hole after rabbit hole. Trying to answer a seemingly simple question: Am I making something people want?