Is Your New Product a Solution Searching for a Problem?
In other words, people don't pay money for a solution unless it solves their problem. As Theodore Levitt, economist and Harvard Business School professor, so perfectly put it:
In this time of great technological innovation, no matter how cool or dazzling a new product might be, at the end of the day, if ain’t solving a customer problem or addressing a customer need, nobody is buying it!
"People don’t want to buy a quarter-inch drill, they want a quarter-inch hole."
As an advisor, mentor and sometimes angel investor, I get to see a lot of new products. Some are from newly-minted entrepreneurs, others from qualified small businesses, all with an excellent idea or the “next big thing.”
But, what always surprises me is how, infrequently, product developers understand the importance of solving a customer problem or addressing a customer need is to their product’s success. It’s their value proposition and why customers will buy the product.
You would think that would be a logical rationale for why they developed the product in the first place. But, they are, so often just caught up in the design, the packaging or the cool technology the product delivers that the very essence of why the product exists – the value it brings to the ultimate customer – takes a backseat, or worse it’s completely overlooked! And without that, there can be a lot of wasted time, energy and resources and little chance for success.
For your product to succeed you need to understand what your value proposition is. Creating a value proposition for your product can be best done by answering a series of four critical questions:
Can you define the problem or need, succinctly – why does it exist; how large is it?Why your idea should come into existence is the question you should answer before you spend any time or money on product development. Too often, entrepreneurs think up a solution, fall in love with the concept or the technology and go headlong into development before they ever know if there truly is a market and anybody (but them) will buy it. By then, they are too committed to backtrack.
So, know what customer problem you’re solving or what customer need you’re addressing with your great idea. Do your homework! The more detailed research you can do on the history and basis (why the problem/need exists), the better you’ll know how to solve/address it. Determine how prevalent it is – this should define the actual market size and geographic focus. And the best way to find these answers is to ask as many folks you think might be prospective customers as possible.
And, a tip-off – if you’re having a hard time defining the problem or need, maybe it doesn’t exist!
How well is the problem/need being addressed today/by whom?Who else is trying to do the same thing (or at least something similar) as you are or has attempted it in the past? Don’t figure you and your team are the smartest guys on the planet. There’s always somebody smarter.
If potential competitors are attacking the same problem or need, how successful are they or have they been? Not only do more digging, but more asking. Find out from prospective customers, “how’re those guys doing?” Moreover, if nobody else is trying to do what you’re trying to do, maybe there isn’t a market.
How will you do it better? – Your real value proposition.On the other hand, if there already is competition in the market solving the problem or addressing the need, that’s not necessarily bad. You just need to ask a different set of questions.
How will you do it better? Is there a niche you can exploit where the competitive products are falling short and aren’t satisfying customer need? An unsatisfied niche is where you define your value proposition – how you are solving either all or part of the identified customer problem, better than it is being done, today, or has been done in the past?
Who’s the ideal customer profile/how will they benefit?Define where the problem or the need most exists in the market. Try to profile your “sweet spot” – i.e., that customer set that will most benefit from your new product and how that will manifest itself. This gives more texture to your value proposition and provides the basis for target marketing and incentives for the customer set that best fits this profile.
New products must solve a problem or meet a need. Otherwise, no value, no sale! Never develop a product in a vacuum, no matter how smart you think you are or think you know what your customers want. There are always more intelligent folks out there, and if you’re not listening to your prospective client, your vacuum will suck your time and money without a successful product.
"The Entrepreneur's Yoda" knows these things. He's been there. May success be with you!
What is your “why?” Have you ever realized its importance to you and your company? Please share your thoughts in your comments. It can help another entrepreneur or small business owner.
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Photo by Charles Knowles licensed by creative commons, we added text to his image.