Talk to 10 potential consumers instead
That’s all the rage and craze right now. It has been so for a while now. And with so many startups around getting funded every week and month, that has more and more started getting the image of the ideal and obvious route to take.
This may be the nth time I am writing about funding here. Every day, I pass up on at least a couple of questions on Quora where people are asking exactly that — I have a brilliant idea, how should I approach investors?
As full of irony as it may be, I don’t want to sound like a broken record; so I simply pass up on those questions. The question today, however, was different. It was interesting — even if unintentionally.
Who can I speak with? That was the only thing that piqued my interest there, and a voice in my head just blurted it out — your consumers!
So I decided to answer the question.
Don’t talk to VCs
VCs are great — I won’t and don’t deny that. One of the biggest reasons why I do talk to a VC is the fact that they probably come across twenty different businesses/pitches before breakfast. So they are in the unique position to offer quite a diverse perspective. Talk to them without an agenda — with the sole intention of learning something new — and you will get amazing insights. Marketing practices going on around you, what’s working and what’s not. Operational nightmares. Expansion difficulties. Hiring nightmares. Everything. They have an interesting story or two on practically every single aspect of running a business.
Moreover, a VC can help you get the pulse of market/investor sentiments. Comes handy if you are a small time angel yourself.
There are many more values that a great VC can add to both you and your business, but we will probably talk about those some other time.
And yet — despite all these amazing positives — I would strongly recommend you not talking to a VC. Not first i.e. Not at just the stage where you have just recently thought of the idea.
And no. It isn’t because:
- You are scared the VC would run away with your precious idea.
- The VC won’t fund your ‘idea’, since it is just an idea right now.
So why? Because despite all the roles a VC can play for you,
there is something that he isn’t to your business. A consumer.
Talk To Your Consumers
Always talk to your consumers before you talk to anyone else. Talk, talk, talk! Talk to your ‘potential’ consumers, your target audience.
There are a lot of ways in which this will help you.
#1. HELP YOU UNDERSTAND YOUR IDEA BETTER
No matter how great a business is, it always starts with a raw idea. One of the main differences between successful startups and failed ones is that the founders of successful startups were able to refine and polish that raw idea into something tangible, something more meaningful, something that ‘just clicks’.
Just because you think it is a great idea, doesn’t necessarily make it so.
Your consumers are what you are starting the business for. Why wait till the launch to expose them to the business. Start evaluating their feedback and response. Their willingness. The thing about your business that would attract them. The thing that would keep them skeptical. Make them a part of your growth and evolution.
#2. FIND MISTAKES AND AREAS OF IMPROVEMENT
You could be making critical assumptions about consumer behavior, the factors leading to success, the bottlenecks. Are you sure you are right? Or are those assumptions valid just for you as a consumer? Remember, even on a macro level, there are multiple types of consumers that exist out there. Unless you get a grip on your understanding of your consumers, you will never know what mistakes are you making in your approach.
#3. FIND THE BEST WAY TO DESCRIBE YOUR PRODUCT
The best businesses out there have always been able to describe their businesses/products in the simplest way possible. Can you say the same about yourself?
One of the many challenges I see around is the inability of entrepreneurs to talk about their products in a simple way. They go on and on about the cool features their products have, how it helps you etc etc. Can you explain what your product does in a simple ONE LINE? If you can’t, you need to rethink how you introduce your product. Talking to your consumers will help you do that.
#4. WILLINGNESS TO PAY
Whatever you’re selling, I’m not buying!
Nothing worse than having a product no one is willing to pay for. Why would an investor even be interested in backing you if you can’t even demonstrate that there exists a willingness for consumers to pay for your product.
- How many consumers are willing to pay for it?
- What are the biggest motivators behind their transaction?
- What could be the roadblock in them transacting?
- How can you overcome any inhibition on their part?
- Imagine a news publication completely free of ads. No annoying popups, no auto-playing videos, no hiding behind paywall (well, they can’t say that now, but they could have when they were thinking of the product). Just pure content.
- Pure journalism. Nothing else. A true medium to listen to the opinion of everyone. A better platform to get the best stories out there, from the best and brightest.
- Stories that are relevant to you, and your areas of interest.
- Stories from thought leaders, industry stalwarts, achievers.
Would you be interested in paying for such a service?
How much do you think would be a monthly fair amount for bringing you this curated, rich content?
What attracts you the most about this platform?
Okay. So you’re interested in the product, but you don’t think you would want to pay for it. What more could the product have to make it worth your money?
Result: A better understanding of how the money till chimes.
A better understanding of the market potential and the market size, as well.
#5. CRAFTING BUYER PERSONA
We talked about it earlier. Consumers can be segregated into different buckets based on their macro behaviors. And once you have done that, you can list out the motivating factors, inhibitions, catalysts etc. for each bucket.
Helps you formulate your strategy better — in marketing, sales, every function.
Helps you think of your product evolution in a way that would be the most impactful.
Sure. talk to a VC. But before that, go talk to your consumers. You have everything to gain if you do, and everything to lose if you don’t.