How do you Know the Need is Compelling?
What you think is a need is really a hypothesis. This is an extremely important question: how do you know that the need you are addressing is real and is compelling? Don't assume that because it makes sense to you, it will make sense to your target customers. You need to go test the market. You can't get this kind of data out of market research reports ("secondary research"). You need to do some primary research. In other words, talk to customers.
Primary Research
Develop a survey. Talk to at least 15 people (or companies) who would be prospective users. It's best to start this with face-to-face interviews, because you learn a lot more face to face. Verify that they have the need, the need is compelling, and they would be willing to pay money to fill the need!
And remember: people might well tell you that they like your idea. They think it rocks. Your challenge is to figure out whether they'd actually use it.
If you do verify the need by carefully thinking through a survey, talking to at least 15 customers, and analyzing the results, there are a number of benefits you'll likely receive:
- You'll learn a lot
- You'll feel better about (have more confidence in) your idea (or you'll know its time to go back to the drawing board)
- When you start talking to prospective team members, you'll have some good ammunition for arguing that the opportunity is real.
- If, later, you do pursue angel or venture capital investment, you'll have some very credible, objective data that supports your argument that the market need is real.
In his book "The Entrepreneur's Survival Guide", Mark Paul describes the key questions that you should answer with market research:
- What do your customers want?
- Why do they buy?
- How and when do they buy?
- How do they currently solve the problem?
- What else do they buy, instead?
The book also describes a very practical, effective method of determining the right price for you product or service. (Get the book - it's worth it!)