If you’re like most entrepreneurs, your business started with an idea. Usually, the idea has to do with what you want to offer. You see a problem you could solve, or you have something of value you want to offer the world. Either way, the center of your idea is you—your product or your service.
That can be a good way to start thinking about your business, but it’s not a good way to launch your business. In fact, 98% of businesses that start this way fail in their first year. And a lot more of them never gain traction and break significant numbers in income, forever spinning their wheels and never truly taking off.
What’s wrong with this approach? It puts the cart before the horse. If you have an idea for a product or a service and then try to figure out who will want to buy it, you’ll spend a lot of time spinning you wheels. Here at Mirasee, we believe there’s a better way: starting with your target market—even before you have a product in mind.
The biggest problem with the product-first model is that it relies on you understanding the market so deeply that you can identify the problem and build the solution all by yourself. Nowhere does it even suggest that your target audience might not be aware of the problem, or that they might perceive it in a different way.
It doesn’t take into account if the people you’re making the solution for are willing (or even able) to pay you for it. For example, does an oil sheikh need a renewable energy source to diversify his energy infrastructure? Probably. Can he pay for it? Sure! But will he pay for it? Probably not.
The second problem with building your product first is that it demands a significant investment of time and money to build and market your offering. An investment that, might we remind you, has a 2% chance of paying off!
As you can see, this approach offers you lots of hard work with a slim chance of success. Those who get behind it will tell you that starting a business is supposed to be hard, that it’s supposed to be risky. They’ll tell you that it’s their way or the highway.
And they’d be wrong.
Let’s assume for a moment that you don’t want to charge in blindly and build a product that might appeal to nobody. But you still want to build a profitable business. What do you do then?
Is it hopeless? Do you have no other recourse except taking gigantic risks and investing tons of money?
There is a better, safer way, which is actually more profitable in the long run. And the core of it is this: start with your target market.
Instead of trying to identify problems and come up with solutions all by yourself, why not listen to the people whose lives are already influenced by those problems? People who are already wishing for solutions to their problems.
And thousands upon thousands of others. Why try to come up with something yourself, when there are crowds of people eager to tell you what they want?
If you start with your target market, it becomes a lot easier to start a business.
You’re no longer staring at an insurmountable “I have to make something really awesome to solve problem X that I’m sure exists, and then lots of people will see how awesome my product is.”
Instead, you have a much more manageable task of “I need to find a group of people I can help, and then find out what they want to pay me for.” It’s not as dramatic… but it’s a lot less less hit-and-miss!
Still not convinced?
Here are a few more reasons why your target market should be your point of departure when designing a business idea:
Starting with your target market is easier than the product-first approach, but this method has plenty of pitfalls, too. Here are some of mistakes to avoid with the people-first approach: