Understand The Market Impact Of Your Idea
The main reason for start-up failure is that they make products that nobody would adopt. Indeed a study by CB Insights showed that 42% of failed start-ups did not have any market need for their respective ideas.
This raises an important question: How can innovators develop new ideas that markets would find compelling?
For instance, Flowtab was an app that aimed at streamlining the drink ordering process in bars by allowing users to order drinks on their smartphones and the orders would be collected on IPads that were connected to the tills in bars.
Prior to the launch of their app, the Flowtab founders studied bartenders and aimed to really understand how Flowtab could make life easier for the latter. Yet, the founders failed to study the other part of their market: The bar customers. They assumed that queuing in bars was a pain point for customers and that the latter would be willing to pay $1 dollar per transaction to eliminate that pain point.
Thus, they set out to launch their product. However, after a year, the start-up had only 12 regular users across 9 bars.
Flowtab, also changed the habits of markets and the founders did not identify the barriers to adoption prior to launching. For instance, after the launch, they found out that poor cell reception in clubs was a hindrance to adoption. Also, when they tried to expand to strip clubs, they found out that users were reluctant to use the app as they wanted to remain anonymous. Had the founders used an MVP, they would have identified the issues earlier in the process.
A study of past innovations shows that ideas would impact markets in different ways, and that based on their respective market impact, different ideas would need different development, go-to-market and scaling strategies. Successful innovators understand this unique link while start-ups that do not succeed often fail to grasp the connection.
Thus, it would be important for you to get a sense of the market impact of your idea, either intuitively (beware of projection bias though) or through an in-depth study, prior to developing, commercialising and scaling the idea