Finding the right problem

Entrepreneurs typically start a venture with a solution in mind, which they usually tend to idealise as ‘awesome’. While there’s nothing wrong with having an optimistic mind-set, they are also particularly gifted in only seeing their own reality. A first step in performing a product/market fit, is to get out of the office and get customers to recognise a genuine problem needing to be solved. A company should therefore concentrate its efforts on ‘loving the problem, not the solution’.

A model tells more than a thousand plans

Rather than starting to write a complete business plan, companies should focus on key factors that will eventually drive their business, and implement these factors into a simple one-sheet business model diagram.

Unique value proposition

The importance of having a unique value proposition is obviously to stand out from the crowd and be different in the solution offering to a perceived problem. This forms the core of your business model, and needs to be part of a larger positioning campaign, determining what place a solution should occupy in the consumer’s mind compared to the competition.

The 40%- and 10x- rule

There are some metrics available to determine if a company has created enough value to differentiate itself from the competition. One metric is if at least 40% percent of surveyed test audience indicate that they would be ‘very disappointed’ if they no longer have access to a particular product or service. Another metric is to determine whether a solution is a magnitude better—10 times is often seen as a reference—than the standard.

Early adopters

New technologies will most likely be picked up by certain ‘types’ of prospects, innovative by nature; the so-called early adopters. In fact, trying to convince the mass of new ideas—prior to the product/market fit—is a waste of time and resources. Companies should focus on gathering feedback from innovators and early adopters first, to get a true sense on how their offer is being perceived.