1. Do consumers recognize that they have the problem you are trying to solve? 2. If there was a solution, would they buy it? 3. Would they buy it from us? 4. Can we build a solution for that problem?" The common tendency of product development is to skip straight to the fourth question and build a solution before confirming that customers have the problem.
I believe that many bootstrapped businesses only do half the work. They solve a problem, but they don’t address the most critical problem.
Find the critical problem where people need to do the same thing over and over again. A Critical Problem Occurs Frequently and Repeatedly The reason why critical problems are always on the minds of your customers is that the problems happen so often. Every day, every week, every month, the critical problems repeatedly occur. For your customers, it’s always the most urgent thing at that time. The issue needs to be solved there and then, every single time. If it’s not frequent, it is likely not a critical problem. If it occurs repeatedly and isn’t easily solved, it is likely to be a critical problem. ...
There’s a joke that every SaaS product is essentially an Excel spreadsheet turned into business logic. When someone uses generic tools such as word processors or spreadsheets to solve a problem, it indicates that the problem is significant enough to warrant building specialized tools. Most problems aren’t highly complex and can often be resolved immediately. However, a critical issue will require developing a more sophisticated system. If your customers are using piles of Post-it notes or a disorganized mix of Word and Excel files to address a problem, you might have identified a key pain point. ...
Customer Preferences for Problem Solving Customers often find alternative ways to solve non-critical problems because they want to save money. It’s not worth their while to seek and pay for a solution that they value less than the alternatives. When Customers Are Willing to Pay If the solution saves them time. If the solution saves them money. If the solution helps them make more money.
Do They Know? The Problem with Problem Awareness When you’re conducting interviews with customers, you will hear them talk a lot about the problems that bother them. These are the known knowns. But your prospects will never be able to tell you about the issues they don’t realize they have.
A good question here is, “At what stage of your workflow will you be using this solution?” Throughout your solution validation conversations, you want to project a clear interest in solving your customer’s problems without causing new ones. If you communicate this clearly in each call, you will create goal alignment between you and your prospect: you both want a great solution that makes things easier for the customer.
Solve the presence or absence problem first, then solve the quality problem. +++
Sometimes we look for immutable things like age or gender niches. Other times the specifics we’re interested in are fluid things like preferences or experience levels. Some niches can be large enough to contain millions of people, and others might just consist of a handful of individuals.
The makers of Bud Light spend more than $1.5 billion every year. They do that because they need to be present in the mind of every single shopper when they think of getting a beer.
If you filter a large group of people by several specific properties, you will end up with an audience that shares those properties. As a result, these people will also share many other things that can make building products and selling them very convenient.
You can become a tribal leader yourself. There is ample room for many leaders within most niche tribes. In such a position, you are considered an expert who also offers products specifically designed for members of the tribe.
People derive their identity from belonging to a tribe. If you can position your business in such a way that makes your product something that “people in our tribe use,” then you will have a guaranteed sales funnel for as long as your niche exists.
If you lead a tribe, it will eventually do the marketing for you. A large following will amplify your messages with a lot of reach, giving you credibility and encouraging newcomers to become customers so they can belong to the tribe.
If you give people the opportunity to share your content and messages with other tribe members, they will. The interconnected nature of tribes facilitates this rapid exchange of information, and if you leverage those channels, your product will sell itself. At FeedbackPanda, it took one well-placed social media comment to start an avalanche of word-of-mouth referrals that lasted for years.
Fortunately, these influencers are also much cheaper to partner with than the prominent super-influencers. Often, they are not even aware of their influence, or they don’t necessarily see it as a monetizable activity. While I recommend you still offer them reasonable compensation, you can approach niche influencers as potential partners instead of just seeing them as a marketing channel.
When conducting market research, analyze your competitors’ strengths and weaknesses. If you have properly validated your problem, you will identify market gaps that are currently unserved. Build your products around these gaps and consider partnering with your competitors to expand each other’s customer base.
Watch out for non-competitive competitive alternatives: the tools people use instead of using an actual product. This can include Post-it notes, an Excel spreadsheet that doesn’t involve numbers, or any general tool applied to a specific problem. These types of makeshift solutions are where you can identify your critical problems—and that’s where you can best serve your niche.
Can They Pay? Will They Pay? Sometimes, you will be serving companies that have a budget for what you offer. Other times, you could help a currently underserved segment of a low-wage industry. The capacity and willingness to pay will be very different between those two.
Knowing whether you need to focus more on sales or on marketing is very important. Some markets require you to reach out to buyers individually. For others, a good and well-targeted marketing strategy could mean you will never have to talk to a single customer before they subscribe or purchase. Being aware of how this will develop over time is essential in order to decide where to focus your attention. ...