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The Importance of Targeting Customer Pain

April 23, 2018

 

Too many ventures get formed or even launched without a clear understanding of the customer pain or need that they are trying to solve for at a highly granular level, and they struggle to survive and thrive. In this brief article therefore we will dig into why targeting customer pain is so important to determine at the earliest possible stage, whether you are a small group of university students on a lab bench working on a project perhaps, or an individual at any level who has just had a new insight or good idea in theory and wants to launch a business successfully as a result.

 

When Alexander Osterwalder and Yves Pigneur published their “Business Model Generation” book in 2010, their 9-panel business model canvas quickly became a standard for ideators and would-be entrepreneurs (not to mention college professors) all over the world to think about how a startup might be built. Although the authors never claimed that this was all that a startup needed to think about up-front, one significant omission that could have been an additional panel (and a foundational one) is thinking about and carefully targeting customer pain (so as to get to the right customer segments and offer the closest value proposition and try to achieve product-market fit). So, how should we think about customer pain and how do we best target it?

 

The first thing to realize is that customer pain (for individuals and organizations) can be open or hidden. For instance, physical pain points are often easy to spot and even quantify and an example here would be knee replacements in the US (which affect around 750,000 people every year today and will affect 3.5 million people a year by 2030. These cost around $50,000 each today to perform. These open and often large in scale pain points are usually being considered by many people including universities and private researchers, large companies, many government entities as well as entrepreneurs. And when a class of these kind of pain points (like curing cancer) is being pursued it is often a very visible public “moonshot” effort.

 

Hidden customer pain points are, by definition, much more difficult to determine. This is because the “pain” may not be recognized by the customer, him or herself (they just continue to cope with the challenges) or the pain point gets no real publicity to an ideator/entrepreneur who may have better approach. For this reason many startup founders “stumble” into these pain points by accident and realize that the addressable market for solving this problem can be quite significant and a startup is very viable. An example here would be Garrett Camp being new to San Francisco (and the US having come from Canada) and not wanting to drive but greatly disliking waiting so long for taxis (and realizing that if he could book them in real time through a smart phone app he could operate under less rigorous private limousine rules). The result we all know now was Uber. 

 

Whether open or hidden, customer pain points need to be delved into deeply once we have a broad idea of the area in which we may gain future traction. What this ultimately boils down to is that we need to both avoid generalizing about a population of customers and rather counter-intuitively narrow the possible customer down to a very specific niche or segment that appears to be in greatest need of our product or service. We can then get out of our lab, office or building and ask them to comment and guide us. Using our two examples above, it is clearly not appropriate to look at the entire population of customers who need knee replacements who might need our new product, which may help them. This population differs greatly in terms of demographic factors such as gender, age, location and economic status as well as psychographic factors such as different personality traits, values, attitudes, interests, and lifestyles of consumers (not to mention what the actual nature of the operation is going to be on their knee). The same would apply to Uber, which today serves a wide audience but when it started served only well-heeled males as a target who disliked using their car in San Francisco who also had an iPhone.

 

In summary then, although a entrepreneurial or more formal startup team will evolve its “story” around why there appears to be sound product market fit in theory, deep customer discovery in a real way is the only way to know for sure and this means getting people on the team to work on this discovery activity for as long as necessary (this may be weeks, months or even years, depending upon the product/service and its complexity). The key is to use this time to do it deeply and well and to draw upon the feedback (by listening very carefully) to adjust your thinking (and thereby the product or service) to ensure what finally emerges is both wanted and adds value (and for which the customer will then pay).

 

Jon Warner

 

Entrepreneur-in-residence-UCR

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