Three Simple Questions That Will Unlock Your Startup’s Real Value

A recent video by serial entrepreneur and investor Steve Blank highlighted one of the traps I see many startup founders fall into – confusing their product’s features with their value proposition. Asking these three questions can help your startup avoid that trap and move further, faster. As entrepreneurs and engineers who spend all day thinking…

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A recent video by serial entrepreneur and investor Steve Blank highlighted one of the traps I see many startup founders fall into – confusing their product’s features with their value proposition. Asking these three questions can help your startup avoid that trap and move further, faster.

As entrepreneurs and engineers who spend all day thinking about our products, it’s natural to think in terms of features. After all, we spend all day talking about our products, our roadmaps, and our grand visions to change the world.

The truth, however, is the customers don’t care about our startups or our products. They care about their problems, getting their jobs done, and a million other things more important than what we’re working on. It’s sad, but true.

Juxtapose this reality with the fact that developing product is costly – both in terms of time and money – and it behooves us to find ways to do as much as we can, with as few resources as necessary. Finding the answers to these three questions can help you do just that:

1 What pain are you solving? 2 What does your customer gain from working with your startup? 3 What are the minimum set of features you need to solve (1) and (2) above?

What Pain are You Solving?

Customers buy from us because we’re helping them to solve a problem that matters to them. For businesses, that might be helping them to do something faster, cheaper, or with higher quality than they can currently accomplish on their own. For consumers, it might be fulfilling one of their core human needs.

For example, I was speaking with a startup that had an idea for an app that would allow financial service professionals to send special occasion greeting cards (such as birthday, anniversary, etc) to their clients automatically, through their system. This product would integrate with large CRMs, Twitter, Facebook, etc., etc., etc.

My question to them – who cares? What problem does that solve for their customer? Does it save them time? Enough to make it worthwhile to buy a solution? Does it help them to win more clients? Keep their existing ones?

By focusing on the features, we miss the bigger question – why does this even matter? If, instead, we focus on the problem, it becomes easier to discover if our product is actually valuable.

What Does Your Customer Gain?

Another question to ask is what does your customer gain by using your product? When you solve their problem, does it free them up to have or do something that they couldn’t do before?

For example, with the greeting card app mentioned above, will customers’ client referrals increase as a result of this “personal touch?” Will it be easier to upsell different products by increasing touch points?

By understanding what your customers gain, over and above solving their pain, it becomes easier to understand customer motives and design a value proposition that satisfies them.

Which Features Have the Right to Live?

Once you understand your customer’s pain and what they stand to gain from using your product, it becomes dramatically easier to prioritize the product’s features.

Because you want to get the most valuable product to market as fast as you can, the goal in this stage is to eliminate, eliminate, eliminate. To do that, take all of your features and evaluate them relative to solving your customer’s pain and helping your customers gain. Features that don’t directly support one or the other are automatically eliminated. Features that only support one or the other are candidates for elimination. Features that support both objectives likely get to stay and, even in that case, only the top 1-3 get implemented in your first release.

You Don’t Know Jack

There is no way to answer these questions properly in a vacuum. Even if we’re experts in our fields, we still only have one perspective (ours) to rely on – what’s to say that the pain we experience is shared by our colleagues?

So, we need to remember that our perspectives on customers’ pain, what they stand to gain, and the requisite features are merely hypotheses that we need to validate with customer conversations and by designing good customer discovery experiments. Once these hypotheses are validated, it’s time to move as quickly as we can to get the product to market.

See you at the finish line.

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