I just finished talking with a friend about a new idea he’s currently vetting. The idea is definitely interesting, but it got me thinking: how do you know if an idea is actually worth pursuing? I didn’t think about it long because the answer is obvious: an idea is worth pursing when it promises to provide a solution to a “hair-on-fire” problem. When we started WePay, we set out to solve a very real pain point. That continues to be our goal today.
“Hair-on-fire” problems create victims who know they have a problem without you having to tell them, want and actively look for a solution, and are willing to overlook switching costs and to pay you to use it.
So how can you find out if you’re idea has the potential to solve a “hair on fire” problem without building it first? The following are three experiments you can try before you build your product.
1. Identify your target customer. Moms between the ages of 30 and 45, you say? Great. Organize a “focus group” of twenty random moms between the ages of 30 and 45. Ask them: “Do you currently have problem X”. They will all answer: “Yes, definitely. I have problem X, and I hate it.” Next ask them: “How would you like a solution to problem X.” They will answer: “Well, we would obviously LOVE a solution for problem X.” And then ask them: “How much would you be willing to pay for solution to problem X,” and they will all say (this time in unison): “A lot!”.
And then you’re done, right? Well, not exactly. Most founders will stop there thinking that their idea has been validated. You can’t just listen to what people say; you have to watch what they do. Right before you end the session announce that “the solution to problem X will actually be available TONIGHT at www.[startupname]ly.com.” This is obviously not true (since you haven’t built it yet), but at www.[startupname]ly.com, you will have a beautiful landing page that says: “enter your email address here, and we will give you the solution to problem X”.
At this point, they (your target customers) have heard you, the founder, define the problem you are trying to solve and extol the virtues of the solution you want to build… and they said that loved it! It’s the best pitch they (or anybody) will ever hear about your product. If they don’t remember to come to your website (and willingly enter their email addresses) within the next few days (on their own, and without any push from you), you are probably not solving a “hair on fire” problem.
2. Identify your target customer. COLD email 20 of them and offer to pay THEM to use your product if they are willing to offer some feedback. See how many respond. If anybody responds, tell them that the offer is oversubscribed and that it is no longer available. See how many of those people still ask about the product.
Sometimes you can’t PAY somebody to use your product, let alone get them to pay you for it. It’s probably good to know that before you decide to quit your day job.
3. Identify your target customer and ask a group of them to define their problem and what they are looking for in a solution. Take those responses, chop them up into “key word lists”, and plug them into Google “search traffic estimator.” If there’s a ton of search traffic, then you’re scratching a pretty big itch, right? Probably.
But you should take it a step further: put up a beautiful landing page, a giant call to action, and a 10-step registration process. Then buy a bunch of ads on Google targeting the keyword lists you just tested. Drive as much traffic as possible to your landing page, and see how many steps people are willing to go through before they quit. The more steps they are willing to suffer through, the more they will be willing to pay you.
If these recommendations are too extreme, treat them as a thought experiment. Just don’t lie to yourself.
A quick (but BIG) caveat: there are VERY notable counter-examples. I think they generally fall into three categories:
Products that solve a problem that people don’t know they have (or one that they can’t articulate), but offer a solution that is so compelling and elegant that it can overcome this obstacle: Dropbox.
A product that predicts and/or capitalizes on a dramatic shift in how we communicate and interact: Facebook, Twitter.
A product that can catch your attention without you looking and hold it without you necessarily wanting it to. These products tend to be viral and engaging: Zynga.