Saturday, January 14, 2012

Startup Failure – Product Looking for Market

[A] What’s the “product looking for market”? 

Well, it’s a product or product idea that is put together backwards. Rather than starting out with the question, “what do people want”, it starts with what the entrepreneur may think what people may want and then just goes about building it. Once he builds it, then he tries to go to the market and looks for people who may be able to use it. That’s putting a cart before the horse. It is even worse when such product idea has no basis or relevance to entrepreneur’s past experience. Then it’s a complete science fiction.  Read more


[B] Why such approach to product building is wrong?
There are very few examples like Amazon that started out as a business plan and were executed like a business plan. Most startup ideas started as one thing and ended up as something else. This is mostly because when you work with innovation, by definition, you are working with an unknown. It’s an experiment where you are trying to find out if your hypothesis is true or not. You know some parts and rest is a mystery that you are trying to uncover. You may know many parts but you are trying to find out how they should come together to create something meaningful. Most such hypothesis will fail and so you want to go very methodical about testing such hypothesis. You have your time, resources, cash and reputation at stake and you want to be wise about it. Read more

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