I used these three product rules to find the biggest problem people have with documents. And I’ve solved it. Learn more about my new product FYI.
I had just built two products that didn’t work. Yes, two in a row. Back to back. Months of work, down the drain. I was licking my wounds from these two failures. And then something changed.
After making those two (embarrassing) mistakes, we came up with three product rules to make sure we never made the same missteps again:
- Market size matters
- Innovate with purpose
- Solve big problems
It’s one thing to have rules though. It’s another thing to actually follow them. Going after giant problems isn’t for everyone. It’s not easy. It’s not fun. And it’s very challenging.
While doing customer development to figure out what to do next for Draftsend, we very quickly identified the number one challenge people have with documents. But at first, we were afraid to go after it.
When there’s a huge market opportunity, it always looks like a scary opportunity. Maybe the technical challenges are really difficult. Or there’s a graveyard of other companies that all went after the same problem and failed.
We had both of these challenges with FYI. So naturally, the doubt crept in… Why would we be successful where others had failed, time and time again?
Before we moved forward on building the product, we had to make sure the market size was worth all the time and effort we’d have to put in to make sure the product was successful.
How do you know when your market is big enough to go all in?
After discovering the huge problem that FYI solves, we came up with three signs to look for to know that a market really is big enough.
Everyone has the problem
In some markets, it’s obvious that there are enough customers. Like social networking or search. Everyone who has an Internet connection on any type of device is a potential customer for Facebook and Google.
When there are enough potential customers in the market, you’ll have an opportunity to serve millions (or even billions) of people and/or earn billions in revenue.
If you’re looking for a massive B2B opportunity, it’s critical to answer “yes” to all four of these questions.
- Does it apply to everyone with a device? — Your goal is to determine if the problem you are looking to solve is so pervasive that everyone needs it solved.
- Does it apply across different types of markets? — Determine if people across different industries want this problem solved.
- Does it apply across different types of companies? — The problem should affect companies regardless of their size and maturity.
- Does it apply across teams? — Make sure that this problem affects people in Marketing, Sales, Finance and every other team in a company.
These questions are simple and straightforward. The challenging part is to find a problem where you can say “yes” to all four of these questions. Those types of problems are extremely rare.
If you aren’t able to answer “yes” to all of these questions, it means that you still have work to do in order to find a breakout market opportunity worth pursuing.
Once you start building your product and prioritizing individual features, these questions also help you pick the right features. We use them to stress test FYI and every feature we want to add to the product, every day. When your features impact broad markets, they have huge leverage instead of only benefiting a small segment.
The problem is getting worse
The best problems to solve are a perfect storm of growth. They are huge on their own. But market conditions make them even larger.
You want to look for market conditions that are amplifying the problem you discovered more and more every day. The problem should be getting fed by something that continues to grow on its own.
For example, the growth of websites created the problem Google solved. And continued growth of new websites helped catapult Google into the giant it is today. People needed a way to find what they were looking for as the amount of websites available online increased. Web directories couldn’t keep up with the natural growth of the ecosystem.
The rise of social media created the problem HubSpot solves, and it continued to fuel the problem. Marketers needed a way to manage the increasing amount of non-paid marketing channels they had to engage with on a daily basis. As new marketing channels came out, HubSpot was there with the perfect all-in-one solution.
When you’re assessing a problem to see if it’s getting worse, you need to look for the trends that are creating the problem in the first place. It’s not just about the problem itself. You have to understand why people say they have the problem. Get to the root cause of the problem and make sure it’s getting worse.
If the trends you discover point to a pain that is growing and not showing signs of slowing down, you’re onto something huge.
No one has solved the problem
The problem exists. And it hasn’t truly been solved by anyone. But they’ve tried. A graveyard of products in the market is a sure sign that others have discovered the problem in the past but just didn’t quite make it. That’s encouraging, as long as you have the first two signs covered with the opportunity you discovered.
Just imagine if they had successfully solved the problem — you would be struggling against hordes of other companies to get market share.
There might be some competitors who exist, but they haven’t actually cracked the code to the problem and don’t have enough customers to make a meaningful business.
Solving a problem that no one has solved before doesn’t mean that others haven’t tried. It just means that they weren’t successful with their attempts. There are a number of things they could have done wrong, but that’s not important to focus on.
Understanding why others have failed doesn’t help you determine the market opportunity. It only helps inform the right and wrong ways to create your solution.
What’s important to understand is that when you talk to potential customers, they are telling you that their problem is not solved. Your goal is to identify if they have (or know of) a solution that they can use or buy. If not, this indicates not only that they have the problem but also that anyone else that has tried to solve the problem has not cracked the right solution yet.
These three signs are exactly what we saw in the opportunity we are going after with FYI. The feedback has been rushing in, unlike anything I’ve ever seen before.
We didn’t just imagine that the problem we are solving is the biggest one worth solving. We kept digging in, deeper and deeper to make sure it was. We kept going until we knew everything we could about the problem, why people have it and what they’ve been doing to solve it (and failing at).
Want to learn more about the biggest, most important problem we discovered in the document space? Sign up for FYI.