The Importance of Nailing the Need
April 28, 2012
The Importance of Nailing the Need
Working in the startup community one hears daily that "Ideas are easy, execution is hard." It's a useful way to remind ourselves that we shouldn't get too excited about an opportunity (or fear competition) until we actually get our hands dirty in the business building and selling process that comes long after an idea is hatched. But today I'd like to talk about what's more important to think about before the bright idea, and perhaps coin a new phrase: "Ideas are easy, needs are hard." When I first began working in new products at Procter & Gamble, I quickly learned to build a health obsession about finding "unmet needs" through in depth consumer research. You would be amazed how much time has been spent over the past 50 years working on  you can question people about their habits around laundry, deodorant and toothpaste. We used tools like "usage & attitude studies,", conjoint analysis, and good old-fashioned one-on-one interviews to tease out and prioritize their frustrations and desires--then used the insights to power a steady stream of new product launches. Innovation in the world of technology is arguably a lot easier than packaged goods. New devices, content, apps, stores and services can solve problems much deeper than, say, detergent with a dash of Febereze.  And the cost to bring a digital startup to market is a small fraction of what it takes to open a factory and shipping packages of toothpaste. But all too often we get me-too startup ideas. I believe startups and investors must spend more time uncovering customer problems that are big enough to deliver a winning idea. One of the most frequent issues that I see startups flounder on is the lack of a compelling consumer need. In pitch presentations, founders typically spend a few bullet points on consumer understanding, then jump straight to the solution and how many  zeroes it will add to the revenue line some day. When that happens I usually back them up to push further on try the customer pain point or compelling need that people may have. Our society worships the story of bright ideas, but I wish more people would come to me saying, "Eureka! I've found a pain point!" Instagram brings a recent and widely understood example of how to succeed by recognizing and solving a genuine pain point. In this short video from Stanford's Entrepreneurship Corner, we learn how Instagram's founders decided to improve the 5 pain points of mobile photos--things like improving the look of photos allowing people to share them quickly across any social media channel. Instagram's Kevin Systrom goes on to say that once you believe you have a great solution, you need to quickly learn whether or not it truly addresses a problem people are having. He advises getting the Minimum Viable Product (MVP) into market as soon as possible to see if a simple product solves significant problems. While this is indeed a key step on the path to learning and succeeding, I believe it is possible to learn much faster by testing an idea before a product is released. The problem of product development is that is takes significant time and money for most ideas to get to the MVP stage, and once you launch, it is difficult to use the early experiences of a handful of friends & family to determine if you have a winner and how you need to adapt. The better solution is to develop a description of your solution--a "concept"--and seek responses from as many people as possible, preferably a group of people who you do not know and who represent a good cross-section of the market you wish to win over. All that is required is a 1-page description of the problem and your proposed solution, and a group of people in your target audience who agree to read it and respond. Website landing pages and videos can also be helpful, but they are not necessary for this first check. I created the Minimum Viable Concept Test to make it simple for startups to get feedback from a few hundred people before they build, with the additional feature of being able to compare their test results against a database of others' ideas. This ability to compare results allows for a much tougher check on the size of a problem and value of a solution. Through this research, my clients sometimes find that they need to go back and dig deeper into the problems of consumers. While this can feel disappointing, those who are determined get back to work on the central problem and bring back a much bigger idea--without wasting the time and money needed to learn this lesson in the marketplace. As Systrom says in the video above:
It turns out that the hard part is trying to find the problem to solve...solutions actually come pretty easily."
Here's one example of a public product that could have learned from earlier concept testing and better problem analysis: Last Fall I ran a MVC Test (on my own) of a digital service called AdKeeper. AdKeeper launched in 2011 as a service to help people save banner advertisements that they notice on the web. The company is headed by Scott Krunit, who was behind the success of About.com, and featured a celebrity list of investors, advisors and brand partners. The company secured $43 million in VC money at a valuation of $100 million. In its launch marketing and pitch materials, AdKeeper explained consumers' problem as follows: "People often find advertisements useful, and nearly everyone has ripped an ad out of a magazine to save for later...But on the web, there is no way to save a banner ad." According to research by AdKeeper, "56% of people would save a banner ad if given the option." As a former digital agency leader, I was very curious about AdKeeper, and wanted to gauge consumer reaction for myself. So I created a concept description of AdKeeper using images and descriptions taken directly from its home page, and launched a MVC Test to gauge the general consumer reaction. The results were...mixed. Compared to my database of other new digital consumer services, AdKeeper scored below average overall. On the positive side, AdKeeper scored high for Uniqueness, Believability and Use Frequency. However, the concept scored below average on the critical measure of Need Fulfillment. I believe this score was low because people generally do not feel that banner ads need to be saved--and while there may a few times where such a service would come in handy, the requirements to create an account at AdKeeper.com and return to the site's personal "locker" to check saved ads seemed to be too much work for too little reward. Despite AdKeeper's data that 56% of people would use it, you must dig further with research to see if there is enough pain for them to really do it. Now, if I had a chance to share these results with AdKeeper before its launch, I would have suggested that the company dig deeper into the problems around consumers engagement with advertising and marketing. Perhaps banner ads are not the digital marketing that people are most interested in "keeping." And I would offer up that the registration requirement was adding more pain and hurdles to the AdKeeper solution. Flash-forward to the present--I checked in in on the latest AdKeeper news. Despite a major digital and traditional marketing campaign to drive consumer awareness, the company seems to have come down from its initial positive buzz. Traffic to AdKeeper.com is down below 10,000 visitors per month, a new low since its launch a year ago. And industry experts and brand customers are beginning to publicly cast doubts. Meanwhile, AdKeeper is making some interesting product moves. It seems to have eliminated the need to register and create a locker for kept ads; now when you click the "K" button on a banner ad you can email it to yourself. And the company seems to have pivoted to a service that allows you to "Keep" any kind of online marketing--somewhat of  a "Pinterest for Brand Marketing." Time will tell for AdKeeper...My fear is that it has already spent a large amount of its raised capital, and both its investors and brand partners won't have the patience to wait for the company to successfully pivot. You often only get one chance for the big bang of press coverage and sales pitches. The moral of this case study is that your startup can significantly increase its odds of success and reduce wasted money and time by honing in on a true consumer problem through concept testing before you launch. Challenge yourself and your idea early and often. What's really exciting in the world of startups today is how rapid adoption of new uses of technology are also creating new needs. In other words, every time we change our habits and do something new, we can hit against new pain points or complaints that open the door to new solutions and business models. Instagram is a prime example: As people became more comfortable sharing mobile photos with friends thanks to smartphones and Facebook, they started to feel frustrated with the quality of photos and Facebook's mobile sharing app. So Instagram developed a solution for this new need. The new class of "social discover apps" are another attempt to solve problems created by new technology habits--aiming to tie together various social media accounts to help you find interesting people nearby. But as I wrote in depth in this post, I believe the need for such services is small--as finding a way to meet interesting strangers is not high on most people's pain meters. In a future post I will share MVC Tests on two new solutions to new social media problems--Path and Pair. The results were pretty surprising. Stay tuned! You should learn more about the MVC Test here, and follow me on Twitter here. +Bob Gilbreath
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