Not everyone may want to buy what you’re selling. Marketing to everyone is a waste of time, effort, and money. One of the first steps in launching a startup is identifying your market. According to CB Insights, 42% of startups fail due to no market need for what they’re making. Those included in the 53% should ask these five questions to create a market need.
The Five Questions of Market Need
It’s easy to think our ideas are golden. But predicting the success of a golden idea is difficult. Being able to climb over our wall of ego and look at what we’re making is a powerful tool. Jory MacKay, in his article for the Observer, suggested five questions to ask to create an offering with a market need:
Are You the User?
Organizations should know the best way to position their products to potential buyers. Nir Eyal presented a simple tool to assess the value of a product to consumers. He calls it the Manipulation Matrix. To use the matrix, you need to ask these 2 questions:
- Would I use the product/service myself?
- Will it help users improve their lives?
Depending on your answers, you’ll fall under the following categories:
- To be a credible facilitator, you have to experience the problem you aim to solve. For example, a former teacher creates software that helps improve classroom learning. Firsthand experience gives you more credibility as an expert in your field. It helps you relate to your audience, build trust, and show a deep understanding of their pain points.
- A peddler has the best intentions of improving the lives of others with their product. But they themselves have no need or interest in using it. Trying to create a solution for a problem or pain you have no experience with, is difficult. Your business will need to invest in research, development, and thorough testing. This is to ensure relevance and effectiveness.
- The entertainer would use their product but knows that it adds little to no value to their users’ lives. Their products exist for enjoyment and psychological satisfaction. If you’re an entertainer, you need to get as much of your product out while it’s still trendy. Find a way to add variation or a new twist on it to keep your audience interested.
- When you’re a dealer, you wouldn’t use your product. You know that it doesn’t provide any benefit or value to your audience. If your product is habit-forming offers no value to your user, you’re likely to develop a bad reputation. If answered “no” to our two qualifying questions, your business is more likely not built for growth.
Do You Care About What You’re Making?
Ryan Robinson, an entrepreneur coach, stated that: “The best business ideas come from your strongest areas of interest.” This means that it’s best to design something that you like, want, or care about. To confirm your business idea, it needs to fall within a profitable niche. Then, leverage your strengths in that area of interest.
Do Other People Care About What You’re Making?
To succeed in building something, ensure that other people care about your product. This means using the power of observation, or you can answer the following questions:
- What problems do you hear people bring up time and time again?
- Are there other people who are feeling this pain?
- Is there a group of people who would enjoy solving these problems?
Hearing from different people will increase your knowledge. You will learn how to make your product marketable.
Are You Solving a Meaningful Problem?
The best businesses solve not simple problems but meaningful ones. And it’s a challenge to see the difference. So, how do we identify meaningful problems to solve?
You can start by looking at the things that bother you the most in your own life. You might be able to find a recurring problem. Those are the ones you need to go after. Once you found the problem, do extensive research to find the best solution to the problem.
Most entrepreneurs think that they’re building the next big thing. Instead, they should focus on solving people’s problems and make their lives better. Work on things that create value and solve meaningful problems.
Are You Solving the Most Important Problem That Your Users Have?
There are lots of problems you can solve for your user. These are problems that you care about, they care about, and are meaningful. A great business idea starts with the basics and solves the most important issue first. So, how do you choose? The best way is to list all the problems. Rank them according to necessity, and then choose the biggest problem you can solve.
Startups face unique challenges every day. The very first is to find a market need. The only way to find the right solution is by being objective.
There are many reasons for the failure of a new business startup. By being aware of those mistakes, you can learn how to avoid them in your business.