Founders often forget that no one cares about their product as much as they do. Even if their product solves a genuine problem for a lot of people, no one cares that the innovator gets the spoils. CB Insights reported that out of 111 failed startups, having “no market need” was responsible for almost half of the failed ventures. Marketing is the only tool founders have at hand to stress-test that their product is not only needed, but Marketing is the sole method founders have of not only making sure that others care about their product, but that they care for the same reason.
Some of the biggest companies in the world once made this mistake. In 1985, Coca-Cola changed its 99-year-old recipe after a successful ad campaign in response to Pepsi’s “Pepsi Challenge” campaign, where consumers preferred Pepsi in blind testing due to their sweeter flavor. They were confident that the “New Coke” campaign would give them a leg up on their blue counterpart, because they had the science to back it up: in a blind taste test consisting of two hundred thousand people, New Coke was the clear winner.
Coca-Cola reverted to its original formula after 79 days. While executives wanted a scientifically better-tasting beverage, the customers it served just wanted Coke. The backlash was so severe that the executives likened the job of answering customer hotline during the time to be grief correspondence.
Some successful businesses began because they understood this idea of alignment. Warby Parker was founded by 4 friends from Wharton. Their pitch idea was unfavorable to the dominant players of the eyewear industry: that it should be cheaper. Luxottica was an Italian conglomerate that made up the majority of eyewear brands, including Ray-Ban, Oakley, and LensCrafters; it also produces them for nearly every designer brand: Prada, Chanel, Versace, and Ralph Lauren. If one were born with an eye too long or short, chances are they paid Luxottica to see. When one of the four friends lost their $700 pair of glasses during a backpacking trip and could not find reasonably priced alternatives, Warby Parker found its reason for existing.
Great businesses start off as ‘disruptive’ to their corresponding industries because they believe in the contrarian truth, or something that few or no competitor in the industry believes in. This is because if a business were built upon existing convention, they’d simply be competing for the same customers willing to pay the same amount as before. In other words, if a business is not disruptive, they don’t have a reason to exist. If others are already doing it, a new company doing the same thing would be meeting the same demand and thus have no reason to justify its existence. Most founders begin with a problem that they have for this exact reason; the founders themselves become the living proof that there exists a demand that isn’t filled within the market, and, by extension, a justification for the existence of their venture.
How to find yours
1. Fill in the Blank
“Everyone in my industry believes ____. We were built on the belief that ___ is wrong.”
This exercise is meant to help you find a contrarian truth that other people in the industry have a hard time agreeing with. A weak answer would be something other businesses would be willing to put as their mission statement, like “Everyone believes customer service doesn’t matter. We believe it does.” Using the Warby Parker example from earlier, a strong response could be “Everyone believes prescription glasses cost $500 because they’re expensive to make. We believe they’re expensive because one company dictates the price.”
2. The “Why Do” search
- Why does [industry] never…
- Why does [industry] always …
- Why is [industry] so…
- Why does [industry] still …
I like this method because it expands the problem-solution model that every startup should use by researching what potential customers think; it uses Google’s autocomplete to mitigate the problem of founders and customers having different beliefs about why a product is good (which cost Coca-Cola millions).
Read the first page of every search, and jot down every complaint. Circle the one that makes the customer sound angriest, and build a business around the solution.
3. The Exclusion Test
Read your current reason for existing out loud. Then ask: "Could my three closest competitors paste this onto their website tomorrow and lose nothing?"
A real reason for existing should make some customers uncomfortable. It should signal that you are not for everyone. Write down one type of customer your reason for existing should repel.
4. The 10x Narrow
Ask yourself: “In what specific area could I come up with a solution that is 10x better than any existing alternative?”
This goes back to Thiel’s idea that a startup avoids competition by creating a single, specific solution for a problem that is difficult for any other business to replicate. Once you've found the 10x claim, ask whether your current reason for existing reflects it. If it doesn't, one of them is wrong.
