So you’re thinking, “But wait a minute, didn’t you just write a post on talking to my friends and coworkers to validate my idea?” Yes, I did. You see, the process I described in my last post seems very scientific and straight forward. The problem is that the measurement device (YOU) is not very objective. Distancing yourself from the perceived awesomeness of your idea enough to actually listen to people is really more of an art than a science. If you remember your last chemistry class, you might recall these things called volumetric flasks. Used properly they are capable of very accurate and precise measurements of the volume of a liquid. The problem is that if you are not looking at the fill line on the flask at eye level, you will end up with too little or too much liquid… even though you think you have measured the right amount.
So how can we, as developers and entrepreneurs, not make this mistake? The problem clearly lies in our own subjectivity. We want to work on something passionate. Something that makes our heart beat faster. And we want to believe in ourselves. I’m not saying this is a not good thing, but businesses are systems. For your idea to work, you have to design a system that creates value for a targeted audience, somehow gets the attention of that audience, and then converts that value into money. Your product idea is only one piece of this equation. If you have a great product you have validated in front of a small audience of users, you then have to calculate how many people you need to get your message to in order to be sustainable. This is why B2C is so difficult. Typically, things like games make very little money per user. Even Facebook has an LTV per customer of just $4. If your LTV is just $4, you will not be able to drive users to your site with paid ads, such as AdWords. On top of that, consumers make decisions primarily based on pleasure. No matter what way you package it, predicting and measuring pleasure is not something easy, arguably even possible, to do. If you start focusing on an audience that will make their purchasing decisions based on logic and facts (i.e. B2B), then you can start measuring and making predictions.
So if you want to overcome your own subjectivity, you have to turn your startup idea into a system. How do I do that? Well, I would start with the Lean Canvas. Modeling your startup idea on the Lean Canvas will give you an idea of the number of users you need to give you money to become sustainable. From there, you can figure out how you will get those users. I’ll discuss that in my next post.
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