- Part 1
We’re writing a series of 6 posts to help aspiring entrepreneurs understand the activities required to 1) develop a hardware product, and 2) build a successful business. We’ve written these based on our years of experience in bringing technology products to market, and the knowledge gained investing in start-ups in Australia, Europe and North America.
Each article will address a different stage of taking your idea to market. We start with Part 1 and the need to validate an idea and finish with Part 6, supporting a hugely successful product in market.
So you’ve had your great idea and you can’t wait to press on with developing your product and building your business. This is understandable as it’s exciting to think you could be on to the next billion dollar idea. But let’s take stock for a second, at this point your path from idea to market is full of assumptions, assumptions equal risk, and risk equals the potential to waste lots of money. This may seem blunt but in the case of hardware products it’s especially true due to their inherent complexity and cost of development. But don’t fret, there are ways to methodically remove risk and have confidence that your problem is worth solving.
It all starts by getting tough with yourself and asking a few vital questions…the worst that can happen is you’re wrong and your idea isn’t awesome, but that has to be better than seeing lots of cash go up in smoke.
1. WHO SPECIFICALLY HAS THE PROBLEM? ARE THERE LOTS OF THEM?
This is about defining the potential size of your market. How are the people who experience the problem different from the ones without it? Break them down to create a market segment, maybe it’s their age or level of comfort with the latest technology. You’re looking to check the assumption that your problem is pervasive for an entire market segment.
2. DO THEY NEED THE PROBLEM SOLVED RIGHT NOW?OR CAN IT WAIT?
This question is about urgency, ask yourself if your market segment must have the problem solved immediately. This is a building block to understanding the value of your product, the greater the immediacy the more likely your market are to part with cash.
3.CAN THEY SOLVE IT THEMSELVES? OR CAN SOMEONE ELSE DO IT FOR THEM?
This question gets to the heart of whether you should be pursuing the problem or not. If they can’t easily solve it themselves and there isn’t an easy way for someone else to do it, you’re on the right track. List the possible substitutions for your idea, if they’re doing a good job of solving the problem perhaps you need to narrow your target market or have a rethink.
4. WOULD THEY BE WILLING TO PART WITH MONEY TO SOLVE THE PROBLEM? IF SO, HOW MUCH?
With this question we’re trying to zero in on whether your customer will have the motivation to actually part with cash to solve the problem. Your business won’t be successful just because you built something cool, be tough with yourself and ask if it is sufficiently painful and difficult to solve that your market segment will pay you to solve it? If they will, congratulations! You’ve cracked product/market fit and can confidently move on having removed a major piece of risk.
Let’s firm up the picture of your market segment by creating a target persona. This gives us a clear picture of who your product is for and helps us make decisions on what to include, and not to include in the product.
The details you capture cover a few important areas, with everything you write being relevant to the product. The goal is to create a reference point for where, when, why and how your target customer will need to use your product. By giving the persona a name and a picture it makes your target more relatable and you can empathise with them when considering the features of your product. In summary, here’s what to capture:
What makes them happy
The best way to capture the information is to find 6 people you know who fit the persona and talk to them. By that I really mean listen, let them explore the idea, mention good and bad things – when they do, ask them why? (My favourite question!)
What you’re listening out for is validation of the assumptions you’d made about why your target market would buy your product. Six is enough of a sample at this stage as anything above that tends to deliver a fair bit of repetition. You’ll get 80%-90% of the useful info you need from this small group.
Now you’ve identified a market gap, a painful enough problem and a target persona, you have a solid foundation to build on. The next thing to consider is what you’re going to build to solve the problem. We’ll cover this in part 2!