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The Biggest Challenge for Entrepreneurs Today

What’s one of the biggest challenges entrepreneurs face in today’s landscape?

Access to capital? Nope.
Access to Talent? Not really.
Coming up with a unique product or service? Wrong again.

The biggest challenge entrepreneurs face is figuring out if there are enough customers that are actually going to pay for their proposed solution to their problem.

customers

What has been ingrained into a lot of our brains is the Six Sigma methodology of Plan, Do, Study, Act. Do some planning on defining the problem, launch something quickly into market, see what happens, fix what didn’t work, and then iterate again and again and again until you get it “right.”

One problem with this methodology is that these iterations can be costly. Market discovery through trial and error is a great learning process, but takes a long time. I’ll use an overused example of the 1st generation iPod. It seemed like apple got it right out of the gate, but they really only got into the market after watching the countless other Walkman replacement companies try, fail, try, fail, and try and fail again.

When you look at the development of the iPod, there really wasn’t a giant leap of innovation from predecessors, but they did what the other companies did not do as effectively: find their customer, find out what was important to them, what they were willing to pay for it, and then deliver on that customer expectation. One could argue that the success of the iPod was not the player itself, but the ease of being able to get the music that you wanted on the device. It was iTunes that made the iPod successful.

Long-term success of your business is going to hinge on figuring out who your customers are, what they want, and how you’re going to get your product or service to them in a way that they want it. You want to make sure you are solving the right problem. Things like secondary market research, focus groups, prototyping, and actually talking with your potential customers at trade shows and where they would actually be using your product help to get those questions answered – and they can actually be done on the cheap.

They say revenue covers a lot of sins, but it also tells you that you’re doing what the customers want and not what your potential investors think the market wants. Investors don’t invest in things they don’t understand. This goes for technology, consumer products, and services. What investors do understand is paying customers. Getting a few of those or a few that have a commitment to buy will make the world a lot easier for you.

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