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3 Factors for Start-up Success

Having created a handful of successful start-ups over the years, and mentored dozens more, I've evolved a simple 3-point checklist to help new businesses beat the odds (the majority of businesses fail within their first year). There are three considerations - Need, Awareness and Trust:-

NEED

Does your target market really need what you're thinking about selling to them? It's not about like or even want. Neither of these emotions are strong enough to relieve them of money.

I developed a graphic a while ago to demonstrate this gradient of sales potential:


The key is to really understand your market. Just hoping or guessing that people NEED your product or service is not enough. You must know. And you can only begin to do that by researching your market. And that means meeting them, as many as possible, and with as much cynicism as you can muster that what you're showing them is probably NOT what they need. Let them tell you, not the other way around.

Of course it is possible to sell someone something they like or want, but there's a purchasing hurdle you need to overcome first. They're not reaching for their wallet until you (or more likely your agent/salesman/relentless advertising etc) pushes them over the edge. It's a hard thing selling. Far easier to push against an open door. Find the need.

AWARENESS

This is in two parts:
  1. Do they realise they need it?
  2. Do they know you exist?
The answer to both of these questions will define your marketing strategy. By way of example, I am currently exploring the market potential for a new type of notebook I invented called TABi (where every page has its own index tab on which you can write a date and short title to help you find it again). Most people still use paper notebooks, especially for lectures and meetings. They're great for making notes, but not so good at helping you find them again. TABi solves this. It's a search engine for paper. We've all been frustrated trying to find a note we've made. This solves the problem. It's cheaper and simpler than using a tablet or laptop (which also solve the problem) and it lets you continue to write on paper - which we love doing. So you'd think there would be a queue of people wanting to buy one...

All well and good until you apply the awareness tests. Very few people, if any, actually realise it's a problem searching for notes in a notebook because until now there hasn't been an easier way to do it. So we assume we're already doing it as efficiently as possible. Everyone searches for notes the same way - flicking backwards and forwards until something catches our eye to suggest we're near or on the page we're looking for. So it's actually not a recognised problem. Notebook users only become aware that this is a problem when they are made aware that a better way exists.

So how do we alert them that there's a solution to a problem they didn't know they had? It's not a better notebook because a better notebook in the imagination of everyone who buys notebooks is one that does all the things they expect a notebook to do, only better. They simply don't expect their notebook to help them retrieve notes. So they wouldn't look for one that does.

This leads to a secondary problem. When people see a TABi for the first time, they don't know what problem it's solving, so they can't immediately understand how it works. After a quick demonstration, it becomes obvious to them, but at less than £20 per item we can't afford to send a salesman around to every retailer to demonstrate it. So just displaying the product amongst traditional notebooks is unlikely to drive sales - even if we attach eye-catching ads to the packaging. Why bother reading it if all you're searching for is a traditional notebook?


The solution (we think) is to send sample TABis to influential people in business so they will hopefully become aware that the problem of notebook information retrieval exists. Then, and only then, can they judge whether their organisation needs to improve its efficiency by buying large numbers of TABis (if you'd like to evaluate one on behalf of a large organisation, please email info@ta.bi for a free copy).

There are plenty of other ways we might drive problem+solution awareness, but most of them will cost too much.

TRUST

Why should people pay you to resolve their need? How do they know you really can resolve it better than anyone else? What is your authority? Why should they believe it?

Credibility is vital before people will give you their money. We're a suspicious species - and justifiably so. Not only are there an increasing number of scams, we're buying more and more online where you can't use many senses to determine whether the seller is trustworthy or not. This is particularly an issue in the sharing or collaborative economy where we are being asked to trust members of the public with little track record of trust. All we have are a few reviews and testimonials at best. The rest we judge with our eyes and, ideally, a referral from someone we already trust.

So trust evaluation is something we are increasingly relying on third party judgement to provide. Which in turn asks questions as to who amongst our friends, colleagues or friends of friends etc can we trust - and why?

This is an evolving landscape that the folks at Google and Facebook are very well aware. The key for start-ups to consider is to put themselves in the shoes of potential customers who have somehow been made aware of their existence to solve a real need. Is what they're seeing/reading/hearing/watching likely to instil confidence or will they believe they'll be taking a risk? Pictures of happy customers, lists of qualifications, testimonials, popular blogs posts, likes and shares on FB, retweets and favourites, a professional appearance in person and online - all contribute to evidence for 'trust'.

Wishful thinking doesn't fool anybody.


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