tl;dr: product-market fit still reigns supreme
I saw the chart below a while back on CB Insights. I seem to have misplaced the actual link. Sorry.
In early stage start-ups, it’s not uncommon to get overly focused on the competition, especially when they are “doing it better,” whatever it is.
Turns out that, though competition is responsible for 20% of start-up failures, that’s 50% less than the core issue of a lack of “product-market fit.”
I suspect that the reason the “No Market Need” is so high is because that innovative products/services are sometimes “here’s a way to do something better” and sometimes “here’s a new way to do something.”
The former is easier. It’s a “better mousetrap.”
The latter is more difficult since entrepreneurs frequently suspect that there is a customer pain there that is latent, but to raise the awareness of the need on the part of the customer, startups have to help them uncover it first.
Jobs with the iPhone launch is a good example
“you need a phone, a browser, and an mp3 player…but I bet you didn’t know that you needed all of them in one device.”
The challenge for any start-up is to ask:
- WHO is the customer who has the NEED for which we have a SOLUTION?
- WHAT are we going to tell them that will earn their attention and interest?
- HOW will we tell them about it.
Seems basic…and it is. Yet, in the rush to get to market, sometimes we run by these fundamentals.