In 2007 Vinicius Vacanti quit his highly-paid job in finance to take on life as an entrepreneur. In a short post describing his reasons for doing so, Vacanti says that most of us haven’t faced the possibility of real failure, and entrepreneurship is a way to test your limits by attempting to create something of real value:
A scary idea started creeping into my thoughts: what if I could build something? Wouldnâ€™t I always wonder? Wouldnâ€™t I regret it? Wouldnâ€™t it eat away at me over the years?
And, thatâ€™s when I realized that I didnâ€™t actually know if I was good enough because I hadnâ€™t really failed in life (at least not professionally). Most people donâ€™t really fail. We tend to take the job that we think weâ€™ll succeed in. We are hesitant to reach. And, if we do reach and succeed, then we donâ€™t reach again.
The only way to know how good you might be at something is to fail trying it.
And, thatâ€™s when I decided it was time to test my limits. It was time to really reach. It was time to quit my safe job and walk straight into almost certain startup failure.
There’s nothing mind-blowing here, admittedly – I just love how Vacanti phrased this.
A “felt need” is what differentiates a vitamin from an aspirin: when we crave something (relief from pain), a product that satisfies that desire becomes a must-have rather than a nice-to-have. Realising this and re-framing a product in terms of this craving is an important step in ensuring a product’s success, say Dan and Chip Heath, authors of the excellentÂ SwitchÂ andÂ Made to Stick.
Becoming aware of this idea is what led to the success of Netflix and NetAppâ€¦Â as well as the demise of countless other companies. In a brief article describing how re-framing a nice-to-have product as a must-have is all about discovering and exploiting a specific “felt need”, the Heaths look at Ray Bards failed attempt at getting his “vitamin” bookÂ publishedÂ and how realizing this idea of a felt need led him to become a successful publisher.
If entrepreneurs want to succeed [â€¦] they’d better be selling aspirin rather than vitamins. Vitamins are nice; they’re healthy. But aspirin cures your pain; it’s not a nice-to-have, it’s a must-have. [â€¦]
That aspirin quality is what Bard now looks for in a book. He says that successful books address a deep “felt need” – that is, readers hunger for the answers the book provides. Classic examples would be diet books, personal-finance books, and books that promise you mega success if you’ll just radiate positive energy to the universe, indicating your receptivity to mega success. Bard has become a talented diviner of felt need. Fully half of the books that he publishes become best sellers. [â€¦]
You’ve heard the old saying “If you invent a better mousetrap, the world will beat a path to your door.” Don’t bet on it. The world’s felt need isn’t for a better mousetrap. It’s for a dead mouse.Â [â€¦]
When engineers or marketers or entrepreneurs get too close to their products, it’s easy to mistake a vitamin for an aspirin. If your team is flirting with delusion, a little love might point you in the right direction.
When Ilya Lichtenstein offered free marketing advice to startups (as a way of thanking the Hacker News community) he received over 150 requests and set to work. Certain patterns started to emerge in his advice, and so he decided to produced a three-post ‘startup marketing lessons learnt’ series (parts two and three).
There’s some fantastic advice to be found in the series – for both those interested in marketing generally and those beginners actively involved in the craft. For example in the Articulate a Clear, Specific, Compelling Value Proposition section:
I’m sure you’ve heard the old copywriting mantra of “list benefits, not features”. Take that to the next level. Take the single most important benefit of using your service, and make that your headline. [â€¦] If you’re building a B2B app to manage payroll, “Cloud hosted SaaS payroll for your business” is not a good headline. “Spend less time worrying about payroll” is a better one. “Cut payroll management costs by 37% instantly” is even better.
And from Find Your Target Market, and Segment the Hell out of Them:
When asked who their target market was, many people responded “small businesses” or, worse, “anyone”. Alright, fine, you sell your SaaS products to small business in the US. But what kind of small business owner converts the best for you? Which customers are most likely to be profitable customers? Who is most excited about your product? You have been tracking these things, haven’t you? You don’t have the budget to target all small businesses, so start with a specific niche or industry you think your product has particularly strong appeal for. Selling time tracking software? Start positioning as time tracking software for accountants, or dentists, or landscapers. How about targeting a specific task or feature and finding people looking for that feature only? [â€¦] Build super niche landing pages or, even better, microsites targeting each specific market segment you want to go after, emphasizing the specific benefits of your product to that group only.
In 1980, as a $5‑an-hour part-time office manager,Â W. E. Peterson joined the small company that would go on to becomeÂ WordPerfect Corporation. Then, twelve years later, after helping grow the company to half a billion dollars in annual sales and becoming the Executive Vice President, Peterson was forced out of the company and set out to chronicle the rise and fall of WordPerfect in his book,Â Almost Perfect.
You can read Almost Perfect online like I did after hearing about it from Jeff Atwood two years ago. Why am I posting this now? Now that the book has a Kindle version I’m re-reading itÂ and liked this paragraph of business advice from the afterword:
If you read [Almost Perfect]Â hoping to learn more about running a business, then I hope you noted the parts about teaching correct principles and allowing employees to govern themselves. In spite of the problems I had understanding and implementing this philosophy, I am convinced it is the best way to run a business. In today’s competitive environment, businesses can no longer afford the overhead of one supervisor for every five or six employees. As organizations flatten and supervision decreases, employees will make more decisions on their own and govern themselves much more than they have in the past. If a company is to function effectively, its employees must have a good understanding of what is expected of them. Very small organizations may be able to find success without defining and teaching correct principles, but any business with more than 25 or 30 people must get organized.
Verifiable, Wesabe, Storytlr, TwitApps, Vox, Swivel and EventVue: All companies or products that no longer exist after preventable problems caused their downfall.
37signals collects their stories so that we don’t repeat the same mistakes, presenting a set of brief post-mortems on failed startups.
The recurring issues seem to be: solving problems that the world isn’t asking for, not having a feasible revenue model (specifically, the difficulty in moving from a free to a paid service), the complexity in scaling an idea from a prototype to a functional product, failing to articulate clearly the benefits the product will bring and failing to focus on the most important product/feature.
In addition, there’s the issue Wesabe encountered: competent competition in the form of Mint:
Mint focused on making the user do almost no work at all, by automatically editing and categorizing their data, reducing the number of fields in their signup form, and giving them immediate gratification as soon as they possibly could; we completely sucked at all of thatâ€¦ I was focused on trying to make the usability of editing data as easy and functional as it could be; Mint was focused on making it so you never had to do that at all. Their approach completely kicked our approach’s ass.
You’ll hear a lot about why company A won and company B lost in any market, and in my experience, a lot of the theories thrown about â€” even or especially by the participants â€” are utter crap. A domain name doesn’t win you a market; launching second or fifth or tenth doesn’t lose you a market. You can’t blame your competitors or your board or the lack of or excess of investment. Focus on what really matters: making users happy with your product as quickly as you can, and helping them as much as you can after that. If you do those better than anyone else out there you’ll win.