Diana Kander’s new book, All In Startup: Launching a New Idea When Everything is On the Line, makes a valuable point for entrepreneurs looking to launch a business: Know your prospect, first!
Many entrepreneurs start with their ability to produce a great product or service that they believe will help prospects. They start with an idea, build a product/service, develop a brand for it and then offer it to their prospective customers. Unfortunately, they discover that this is the “startup loop of despair” when no-one is racing to buy. Why? Because the product/service is not meeting the real needs of potential customers. Instead, she say develop your idea, get to know what your prospects really want, build the product/service that meet the need and then develop a brand to create a profitable business.
She makes four key points:
- Startups are about finding customers, not building products.
- People don’t buy products or services; they buy solutions to their problems. (As the classic statement goes, people don’t want drill bits, they want to drill holes. The store that makes it easy, affordable and convenient to find the solution to drilling holes, is the one that gets the customer.)
- Entrepreneurs are detectives, not fortunetellers. Their job is to ask potential customers what they want and under conditions they will satisfy the needs.
- Successful entrepreneurs are luck makers, not risk takers. They aren’t gamblers who take huge risks with capital; instead the focus on building effective strategies which minimize risk and eliminate the need for lots of luck.
Her book is a business novel, where the protagonist is playing in the World Series of Poker. It’s an easy, fun read. She’s right: entrepreneurs shouldn’t commit All-In until they’ve proven that their prospects want your product – and you have a business model to support it. Do the customer-market research first and then solve the business model puzzle – and you’re on the road to a successful startup!
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