Deliver value only on dimensions that customers care about

Deliver value only on dimensions that customers care about

Most markets are like the car market. Some people like bigger cars, others like efficient cars and then there are some who like premium cars. That is, markets aren’t homogeneous. They consist of different sets of people who value different aspects in a solution.

Because different segments value different aspects, an improvement in one aspect will only be appreciated by that segment and get ignored by everyone else in the market. For example, if the customers in a particular segment are price-insensitive, your discounts won’t work on them. In your mind, a discount should clearly work but for a certain segment of customers, it may actually decrease the appeal of your product for them. But, if a customer segment is price-sensitive, and you give them a clearly higher quality product at slightly higher prices, they may not care enough about the quality to make a switch from what they usually use.

All sophisticated solutions start extremely simple

All sophisticated solutions start extremely simple

There’s always a temptation to launch a fully built product with more features and capabilities than existing competitors. It’s exciting to build the next Google, the next iPhone or the next SpaceX, isn’t it?

This temptation is dangerous because even the most successful products in a market had simple beginnings. No product arrives in the market fully fleshed out. The company behind a successful product has developed its internal capabilities and know-how about various tiny but important details over a long period of time. On day 1, a startup simply cannot match such capabilities.  ...  Read the entire post →

People don’t like using technology

People don’t like using technology

There’s an inherent tension between how an engineer sees the product under development and how a potential user sees it. Engineers get excited by the technological advances and configurability of the gadget. A user sees all such complexity as overwhelming and off-putting. It's easy for a creator to forget that the user has a life to live and using their product isn’t a highlight of her life. Rather, it’s likely a chore.

Only two types of startups exist: technology-led and culture-led

Only two types of startups exist: technology-led and culture-led

There are two ways an entrepreneur can fail: a) launch a product that nobody desires; b) launch a product that people desire but with no significant advantage over established competitors (hence give no strong reason for a customer to switch away).

These two failure modes have their analogous success modes: a) culture-led startup success where a new desire is discovered and fulfilled; b) technology-led startup success where new technology is used to fulfill an existing desire.

Search for market-product fit, not product-market fit

Search for market-product fit, not product-market fit

The best way to discover unambiguous market trends is to look for instances where customers are innovating by themselves by modifying or re-imagining existing products.

Another way to discover good business opportunities is to take the latest innovations in technology and imagine how can such innovations offer a radically better solution for existing customer desires.

Be in the desires market, not the solutions market

Be in the desires market, not the solutions market

It's important to clearly distinguish between what people desire and how they fulfill them. Our desires usually remain the same, but methods of fulfillment keep changing. For example, the desire to have good oral hygiene can be fulfilled in multiple ways: toothbrushes, mouth wash, or even by crunchy foods like carrots that help clean mouth as we chew on them.

What people care about is their desires and not how they’re currently fulfilling them

Businesses exist to fulfil human desires

Businesses exist to fulfil human desires

Human desires have been shaped by millions of years of evolutionary programming and therefore haven't changed much during the course of history. In fact, the most fundamental desires of food, sex, health and security have remained the same as they were for our hunter-gatherer ancestors.

Startups succeed because people are forever looking to fulfil their desires better than before.