Be passionate about the territory, not the map
The business that dominates the market is often not the first but the one that learns from the first to finally get it right enough to penetrate the mass market. Think Facebook, not Myspace. Think Google, not Altavista. Think iPhone, not Blackberry. History is littered with late movers over taking first movers.
But why?
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.
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
Many people say they want to quit smoking or reduce their alcohol intake.
Yet days later they find themselves smoking or drinking again. How many times your friends have told you that they want to get fitter, only to later discover them ordering a large, cheesy pizza?
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.
You create value when you fulfill the unmet desires of people better than the alternatives they have (from competitors).
However, a fatal but common mistake that entrepreneurs make is misjudging what makes something valuable.
Statistics is all about calculating probabilities, and there are two camps who interpret probability differently.
Frequentists = frequency of events over multiple trials
Bayesians = subjective belief of outcome of events
The most common mistake with risk is NOT differentiating: personal, unique risk
FROM
collective, average risk.
1/ Giving advice is a strange thing.
2/ First of all, let's get this right off the bat: the advice-giver accrues MORE benefit from giving advice than the one who's receiving it.
3/ When we give advice, our half-formed thoughts crystallize and tell us clearly and reinforce what we believe in.
We recently ran an A/B test and here were the results.
In the test results we still don't have 95% statistical confidence (probability to be the best) but we're going ahead and implementing the variation on homepage.
Why?