Where do most entrepreneurs get inspiration for new products? By thinking of items they themselves wish they could buy. This is why there are so many new products directed at new college grads, and relatively few targeted to folks in nursing homes.
Launching a company to create a product you want to buy is a great idea. You're likely to put your imagination, energy, and passion into it, and you'll always be more effective at selling something you yourself would willingly pay for.
But you can hit trouble if you make the mistake of building the product to your own specifications. That's what happened to Eric Warnke and Mark Fossen, founders of the companies Surreal WiFi and Backup Box, both based in Edmonton, Canada. Surreal WiFi is three years old and deploys and manages hotspots in restaurants and businesses at 125 locations throughout Canada. Backup Box allows customers to back up Web servers to services such as Dropbox and (shortly) Google Drive. Launched in March, Backup Box already has more than 2,000 users--and counting--and has helped back up about 6 million files.
"With Surreal WiFi, we accidentally built a product for ourselves and not for our customers," Warnke says. "Backup Box benefited from the lessons we learned." So can you:
1. Solve problems, not pain points.
"A lot of startups create business models around easing a pain, but it's a tiny pain--not something people are willing to pay for a solution to," Warnke says. Instead, he advises, "Actually solve a problem."
Case in point: Rather than seeing itself as a hotspot provider, Surreal WiFi considers itself a marketing company. Its real benefit to customers is not wireless Internet access for their customers, but rather the opportunity to market their products via splash pages and email sign-ups. "Not having Wi-Fi is kind of a pain, and it's easily solvable," Warnke says. "How to get people to stay longer, and how to collect email addresses is a problem restaurant owners consider on a daily basis."
2. Simpler is better.
Originally, Warnke and Fossen loaded up Surreal WiFi with all the features they themselves would want, but they soon realized their sophisticated technological tastes were different from those of the typical restaurant owner. "We started out with network options where you could set a router to transmit power or change the channel it broadcasts on," Warnke says. They soon learned that restaurant owners didn't need all these options, and the more functionality their product had, the easier it was to make a mistake that might disable it.
The moral of the story is to start with the fewest possible features and plan to add more as needed. That's a lot better than starting with too many and needing to take some away.
3. The customer isn't always right.
"One of the biggest things people told us with Surreal Wifi was that they needed the ability to block individual users, to prevent them from downloading movies and watching all day long," Warnke says. As it turned out, that problem never materialized. "Now I tell them, 'If you ever have that problem, call me and I'll give you that feature.'" No one ever has.
4. Sell it before you build it.
Inspired by the start-up Buffer, the partners began selling Backup Box before they had a product to sell. They knew from discussions on Dropbox user forums that customers were eager for an FTP interface that would work with the service. But they didn't know which features customers would want, or how much they'd be willing to pay.
To find out, they created a website for Backup Box describing the service and offering a variety of plans ranging in price from free to $99/month, with and without limits on data transfers per month, the ability to schedule transfers in advance, and other features. Once someone clicked on a plan, the site would come up with a page explaining the product was not ready yet, and inviting the user to leave an email address. That gave them detailed information that helped them create plans and pricing later on.
5. Don't listen to your friends.
In fact, you may not want to even tell them about your product idea. "When I created the landing page for Backup Box, I didn't tell the large mailing list of entrepreneurs I was on, or my friends and family," Warnke says. "I knew they'd go there and put in their email addresses because they'd want to support me." And that was the last thing he wanted. "Your friends and family can't provide validation for your product."