The best part of any startup is the aha! moment. Insight and clarity arrive spontaneously, as if by magic, and innovation is born.
That blissful moment is fleeting. What comes next, all the work necessary to actually take the innovation to market, is incredibly hard and stressful. Maybe that’s why some entrepreneurs tinker endlessly with their foundational concept and their message instead of letting them settle. They’re chasing that rush. It’s understandable — but it’s also the last thing a startup needs.
“At one of my startups, I would get bored saying the same thing every day,” John Lilly, a partner at Greylock and a former CEO at Mozilla, told The New York Times. “I decided to change it up a little bit. But then everybody had a different idea of what I thought. So, my big lesson was the importance of a simple message and saying it the same way over and over.”
Find Your Magnetic North before You Begin the Expedition
Lilly’s advice is solid — but only if the startup’s foundational concept is solid, too. At a lot of startups, people lack domain expertise in the field they’ve entered. That’s a situation fraught with problems, particularly when it comes to determining whether there’s a product-market fit.
Too often, startups are founded on the idea of fixing a relatively minor pain point. Even if millions, or even billions, of people are inconvenienced by that minor pain point that doesn’t necessarily add up to a viable market for a solution. (Ronco’s inside-the-shell egg scrambler might be the ultimate example of this.)
If the solution involves a new set of pain points — meaning the customer must devote time or money to the problem or if they just don’t think the effort will move the needle for their job — most people won’t bother.
At our fund, we had a three-point test for any new product:
1) Is the pain point important enough that someone will act on an email?
If the consumer doesn’t care enough about the problem to even respond to an email, your product is already dead in the water.
2) Is that pain point significant enough that they’ll pay for it?
Sure, a few people told you your idea was good. But how many of them would include it in their budget?
3) Is it a pain point worth solving?
OK, even if they’ll budget the money, will they budget the time? Will they change their systems to accommodate your solution? Will they add this new responsibility to someone’s job description?
If your product passes all three of these tests, you probably have something. It’s really that simple — but, like sticking with your basic message, a simple idea can be hard to execute.
Turning on a Dime (or $5 Million)
Most successful ventures do, in fact, require an adjustment in their messaging or their execution at some point. So, how do you tell the difference between that select group and the majority that will never succeed no matter how many times they tweak their message?
There’s a term that came into vogue about 10 years ago in this space: pivot. That’s a situation where you can leverage what you’ve built to try to turn the ship a little bit in a different direction for different positioning with different features based on market feedback.
And then there’s just complete reinvention. Often when a company is flopping because there’s no product/market fit, they’ll say, “Hey, we’ve got $5 million left over. Let’s come up with a new business idea.” And frequently it has no bearing on anything the team was doing before. That’s not a pivot — it’s a divot. You just dug a $5 million hole in the ground.
Basically, all you need to be a successful entrepreneur is the ability to tell a good idea from a bad one and then determine the difference between a pivot and a divot. Simple, right?