A founder’s answer to the question, “Why is now the right time for your startup?” has two components... ⏱️
- Technology Inflections
- For instance, around the time Mike invested in Lyft, GPS locators in cell phones had just gotten good enough for ridesharing
- Adoption Inflections
- Also around the time of Mike’s Lyft investment, enough people now had smartphones that you could count on anyone who wanted to drive/ride being able to do so
The ‘Rule of 20’: Talk to 20 people in your target market segment 🎢
- Needs Experiments: With the first five people, ask them about how they do their job and say nothing about your product idea/what you do/etc. (you’re discovering the needs of your target customer) :
- Validation Experiments: With the next five people, ask questions aiming to validate the need for idea/product
- For example, say, “I notice you’re doing X. Why is that?”
- Assumptions Experiments: With the third tier of people, ask questions like, “Wouldn’t it be better if…?”
- Solutions Experiments: With the last five people, pose your product idea
- Ask, “Would this product be interesting to you?”
- One important point: When running through these experiments, as a founder, you must drop your ego and focus on a search for truth (don’t try to force your idea on anyone)
Founders should make an honest attempt to look at every experiment with their product idea that’s ever been tried and ask... 🔬
- What were the assumptions?
- Why did it fail?
- Why are my assumptions different?
- How is the world different in a way that may change the outcome?