One Simple Question
Ninety percent of startups fail and 90% of those don't make it due to market failure.
Asking and answering one simple question would eliminate a lot of struggle, waste and strife and greatly increase the chance of success.
What is the problem worth solving and is there a path to getting paid?
I know, it’s an obvious question. Of course, it needs to be asked and answered. But why is not having it answered so pervasive. I see it with startups and established companies. The experienced CEO and the first time founder. We have Steve Blank, the recently deceased Clay Christensen, The Lean Startup, I-Corps and yet I see it everywhere and all the time. Just yesterday, I was talking, Zoom of course, with a founder bringing a new device to market to help improve the functionality and availability of protective masks (PPE). He and his team were full of energy. And they had a big impact idea, especially right now!
As we were wrapping up, he says, “Thank you Chris. We started with a real problem that came from our medical center but as we progressed and have been working hard on solutions, we lost that focus on the problem we are solving for our beachhead market. You make it so simple. Thank you for bringing us back.”
Recently I met with another local startup led by an experienced medtech founder. Since we met a couple years ago, I had been tracking him and his company. They have already spent millions of venture capital but their value prop addressed an issue that wasn’t a critical problem in their customers minds and had no existing form of reimbursement. They had FDA approval and good clinical evidence but were continuing to struggle with market traction. Smart people, clinical value, millions spent, committed and passionate team … but not working with a problem worth solving in their customers minds. An exercise in futility but they were still pressing forward. Until they refocus and begin to address this One Simple Question, they will continue to spin their wheels. And likely become another statistic.
Launching a company and/or a new disruptive technology is filled with peril and moments of joys, days that just seem to flow and times of despair but ultimately, if done well, it can be a beautiful journey, one of accomplishment and contribution.
But let’s get off on the right foot and give ourselves the best chance of success. The success of your startup and/or your new product launch will depend upon the ability to address an already existing problem in your market - and specifically, in the mind’s of your customers. Given the resources, the probability of building it and getting it approved is relatively high. So start with your greatest risk. What is the problem we are trying to solve and how will we get paid for it? It is simple and obvious - commonsense - but way too often it is missed. And don’t get me wrong, while the question is simple, getting to the answer is challenging and often elusive. Both a science and an art. But that is a discussion for another day.