Startup Nugget#1: Assume negative purchase intent until proven otherwise.

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The number one question most startup founders struggle with this is this: How do I find a must-have problem to solve? 

While there is no easy answer, I will attempt to give a simple one. “Just stop”. Yes, you heard me. Just stop looking for a must-have problem and go find a will-pay customer first. 

Let me explain the difference in the approaches. The problem-centric approach will blind you to several biases and assumptions where you look at the seemingly horrible things people live with and decide to challenge everything. But really the pain-point you perceive is termed observational pain. There is a high chance that the customer isn’t really feeling the pain you are feeling on his behalf. Too often, even while validating the pain-point, customers won’t tell you this truth. It is the most frustrating trap to fall but really quite unavoidable as a first-time founder. Ask me, I have experience in this. I have scars to show!

In the last 18 months, while doing research for ClosingPage, I spoke with more than 200 potential customers in the B2B sales domain and have struggled rationalizing people’s outdated business practices. 

I would pick a likely problem and ask, “is this a problem to you?” Most of their answers were GEEZ, YES I HATE IT. PLZ FIX IT. 

But when we built the respective solutions (an elegant simple tool) to solve these seemingly ungodly problems, many of them simply didn’t use the solution. When asked, they generally pointed fingers towards lack of a feature or some other super expensive integration etc. But I have come to realize that it never really mattered to them. It was quite an eye-opening experience!

Founders are inherently optimistic. They believe that anything that’s broken can be fixed and it must be done despite minimal resources. But the same optimistic POV can be your own enemy while hunting for a worthy problem to solve. 

Customers are people. And people are typically unsure of whether a solution will fix their problem or not. This is possibly because you are great at pitching (kudos!) and have managed to persuade them by your vision or charisma or some other inexplicable factor. It could also be FOMO (Fear Of Missing Out) on your product. Any which way, you are screwed if you assume they are locked in to your startup. You are screwed further if you base your feature road map or product strategy based on these people’s empty validations. 

The alternate approach that seems to work brilliantly is the one that defaults to what I call a “negative purchase intent.” That means when you ask a customer questions about a particular problem and how it’s badly affecting them, you don’t take their answers seriously unless they show undeniable interest in paying for a solution. It is tricky, awkward and might seem a bit rude when you keep bringing up the “will you pay for the product?” question. But that’s the name of the game. From what I have gathered from succesful peers, only less than 10% of customers actual mean when they say they will pay for a product that solves a problem they have. Why waste mental cycles and energy focusing on the other 90%? 

Quickly put together a solution, prototype a product and serve these 10% of the potential customers. Since they are badly affected by the pain-point, they will be happy to pay you money. It doesn’t have to be too fancy, just a quick pre-order or payment contract should get you to this milestone. Make it friction less and eliminate risk by throwing in a discounted price or even a 60 day money back guarantee if necessary. Still, ask the awkward question and always assume negative purchase intent until otherwise proven.

As a startup, your time, energy and resources are under absolute pressure. Be wary of people who will just (unintentionally) distract you and inhibit you from serving the “will-pay” customers. 

I’d love to hear your thoughts and answer any questions on this topic.