One of the first jobs in unlocking a business model is to define a customer segment, and figure out customer “pain points.” You know you’ve struck gold when you uncover a “hair on fire” problem that is so tremendously painful the customer will work with your earliest version of the product just to douse the flames.
The belief about pain points is reinforced by investors, incubators, accelerators, and entrepreneurship curricula like Lean LaunchPad. I teach a version of Lean at NYU ITP, and like all good entrepreneur coaches, I too encourage founders to get out of the building, discover customers, and find the pain points that need to be solved.
The easiest shortcut is to “scratch your own itch” – solve a problem that you, the founder have. You’re an “n of one,” or sample size of one, and your job then is simply to make sure that you’re not the only one with that problem – that you’ve found a pain point that if solved would form into a nice exponential growth curve for your company.
The challenge with the scratch / itch formula is that founders who skew younger, and male, tend to go for the superficial itch and not the deeper underlying pain points. Entrepreneurs seem to be stuck in a logic error that never satisfies our need for time, love, food, or money. For our own lives, and the lives of the people we are trying to serve.
There’s been a call recently to encourage for profit, growth seeking startups to tackle the “real problems” that face our culture – but we seem trapped in a circular logic that keeps us stuck in superficial, temporary needs.
How do we get to big ideas when so many founders are encouraged to simply solve for the known, obvious pain points. And how do you find any competitive advantage when solving for the known knowns?
Defining customer needs, it turns out, is an art, and a science. Pursuing hypotheses through customer interviews is a great way to validate early thinking and save precious time ensuring that there is an actual market need a solution. But how you go about conducting interviews, what do you ask? How and when do you talk about your solution? When do you stop searching for the pain, and how do you prioritize that first list of features to launch your idea?
We’ll be conducting a series of online courses at Reason Street to explore the art and science of customer fit. If you’re interested in learning how to get underneath the obvious truths, and find out how to position your business to solve deeper human needs, sign up for our upcoming class, with an A/B tested title that seems to fit your real pain points about business models:
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Reason Street's Most Popular Business Models
In a pay-per-use business model, use of a product or service is metered, and customers are charged when they use the service. “Pay-per-view TV” and online journal publications, custom research firms, who sell access to high value content on a per use or per download basis.
A two-sided-marketplace business model is a platform for economic exchange between two distinct user groups that provide each other with the benefits of a large network.
The explosion of the “subscription economy” is upon us with everything from flowers to car sharing to data storage to beauty care products now being billed to us on a monthly basis.
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