The most common approach to starting a new business or developing a new product is to start with an idea. This approach is inherently wasteful and has built-in obstacles. It’s a symptom of a solution oriented focus.
I’m intimately familiar with the problems of a solution approach. My main business is Blue Bridge. It’s a small dev shop that’s been in business for a little over eight years providing development services for the Joomla CMS. Our primary channel is SEO and recurring work forms the bulk of our pipeline for generating revenue.
This is a solution focused business. We serve anyone with a budget who needs Joomla help and they find us through search.
This causes myriad problems:
- We can’t market our services beyond a few channels because we don’t have a target customer.
- We can’t do any validation on new products or services because we don’t have a target customer.
- We can’t position ourselves effectively because we don’t have a target customer.
- We can’t even do research because we don’t have a target customer.
- Additionally, we are tied to the market share of Joomla. When it rises, we rise, when it falls, we fall.
What happens when you take the solution first approach and realize some of these problems? You do what I’ve done and try to work your way backwards to the customer by asking questions like:
- Who uses us?
- What patterns are there in purchases?
- How are people finding us?
Unless you’re very lucky, you’re not going to get good answers- everything is murky.
I’ve analyzed our projects as a consultancy several times over the years and tried to identify patterns in clients or jobs. Even though we have 8 years worth of data, because we haven’t had a customer first approach, there are only weak signals.
The way this manifests in new businesses and products is an idea. It will include a target customer, but the focus is on the solution.
The product idea is so ingrained in how we think that when I tried to discuss starting a new service without an idea to my mastermind, they became confused and I had to explain again how there was no idea. It was a little bit mystifying to them that I wanted to start something new and didn’t know what it was.
It’s sort of like saying to a friend, “I’m moving.”
And they ask, “Really? Where are you moving to?”
And you respond, “I don’t know yet.”
The solution first approach is misguided because it presupposes information. There are critical assumptions inherent to starting with an idea.
You assume that you can reach a customer, that you know them and their problems, and that they actually need your solution enough to pay for it.
This misinterprets the fundamental nature of business: a customer needs or wants something to overcome a problem and the business provides a solution to that need.
With a product idea, you have the solution, which you *hypothesize* is valuable, and you try to figure out a way to work backwards to verify the problem is worth paying for and that there is a real customer behind that problem.
You’re starting at the wrong end of the equation.
You’re trying to go…
solution -> problem -> customer
customer –> problem -> solution.
Commitment and The Lack Thereof
It’s a matter of commitment. When you start with an idea you’re not focused on the customer, you’re focused on the solution and what it means to you.
What it means to you financially, and to your interests, and to your goals.
There’s a saying in the startup world: don’t marry the solution, marry the problem. Apparently, this is as far as people want to take it. I propose to take it a step further and marry who has the problem: the customer.
Many aspiring entrepreneurs approach businesses like Friday night at the bar. They’re just trying to get to some specific short term goal for themselves. Ideas are the currency and everyone is hoping to get lucky.
You do this by focusing on the business side in “what it means to me” and not on committing to serving a customer and in doing so you rob yourself of leverage.
There are two ways to you rob yourself of leverage by focusing on the solution: intelligence waste and asset abandonment.
The first loss is that you fail to build intelligence about your customer and the market.
If you’re committed to serving a customer rather than providing a solution, every lesson you learned from the customer builds on the last. By starting with a customer and staying focused on the customer you build a corpus of knowledge that impacts the entire business: message, position, marketing, channels, and products. It’s the inverse of the problems I listed in the introduction of this blog post.
When you’re solution focused, if you can work back to a target customer the intelligence that you gather is about validation and looking for signal whether or not it’s there. If you can’t find signal, often the “pivot” involves looking for a new customer. You fail to benefit from what you learn about who you thought you were serving because you are continually switching horses.
The second loss in leverage is further down the road. If you have committed to serving a customer the solutions you provide them will naturally take advantage of the marketing, influence, products and channels that you already have in place. Validation is easy. Every launch is a warm launch. Proven channels will market each new venture.
On the opposite side, if you’re solution focused, you essentially throw out what you already have every time you start a new product. Even if the idea seems like it might work for the same market, if it’s not serving the customer you’ve already identified and their known problems and needs, there is no guarantee that it’s going to work the same as the first.
How I’m Applying This
This year I wanted to add $5,000 a month in profit and reduce the time spent in the business to one day a week (right now, it’s three days a week.) The underlying purpose of the goals was that I wanted the business to become more product and less consulting based.
In my last post, I talked about how I decided to back burner a productized service that I thought would get us closer to that point. The service was based on our existing Joomla focused business and suffered from all the problems of the main business and our solution oriented approach.
Afterwards, in reviewing my goals, I decided that rather than try to launch another service with the same weaknesses I wanted to address the root cause: that I was approaching things like it was Friday night at the local bar.
I decided to focus on a customer rather than generate product ideas and weigh them against my goals. To that end, I developed criteria for who would be a good target customer for us?
- Who could we serve?
- Who did we have access to?
- Who could get enough value out of a service that we could provide to replace our solution focused revenue?
- Who did we already have information about?
- Who would I be willing to work on solutions for over the course of years?
- What domain was I interested in enough to commit to long-term?
After lots of research and thinking I decided to commit to serving small digital marketing agencies. The repercussions of this choice are that we have little chance of making this year’s profit and time goals. Instead of doing product development, I’m doing lots of customer development, research, and networking. We’re not building anything yet, but we are laying a foundation.