The idea of launching a product, running your own business, and being your own boss is very appealing. Perhaps that's why so many people risk doing it. The problem is, many of them don't succeed.
There are hundreds of reasons a startup can fail, but let's focus on one for a minute: your product. Just because you think your product is great, doesn't mean the rest of the world does. Before jumping into anything too serious, ask yourself these questions to determine whether or not your product will fail before it even launches.
Is it something people want?
Before you start building, you need to figure out if your product is viable. Is it something that you want to build, or is it something that people want to buy? It's easy to get excited over an idea only to realize later on that nobody actually has a need for what you're making.
So how can you tell if a product is viable? It's not easy, but you can feel it out by asking potential customers what they think of your idea, if they'd use it, what they'd pay for it, etc. You'd be surprised at how honest most people will be with you.
Has it been done before?
Pick a problem and it's probably been solved already. At least, that's what it seems like these days. Seriously, you want a social network for your cat? You got it. How about an app that does nothing more than text your friends the word "yo"? Ditto.
But you may not be completely out of luck. If you're trying to do something that's already been done, it may still be possible. You'll just have to work a bit harder at it and do it better. The most well-known example of this is probably Facebook. Everyone was using MySpace when Facebook came along and, against all odds, practically destroyed them.
It's not impossible to successfully do what's already been done, but you'll need to study your competition. Find their weak spots and beat them at their own game. Do what they're doing (or what they're not doing), but do it better. That's how a second-to-market product will have a shot at winning.
Is it economical?
Your product must be cost effective so you don't drown in the debt of producing or maintaining it, but it also needs to be cheap enough so your users can afford it. The only reason every other car on the road isn't a Tesla right now is because of their higher-than-average price. (Why do you think they're trying so hard to get the cost down?)
This isn't an easy task either, but overpricing your product can be detrimental to your startup. Again, ask your users what they're willing to pay and see if it aligns with what your costs are and what you're comfortable with the business making. How many people need to buy or subscribe to make it sustainable? Are those numbers even achievable?
Don't forget to take into account operating costs, marketing budgets, employee salaries, and other expenses. They can add up fast and, if you're not careful, quickly run you into debt.
Is it too confusing?
Maybe your product works well, but the average person can't figure out how to use it. That's not good in terms of revenue, because they probably won't become a paying customer. You could be losing your best customers because your product is too confusing to them.
Fortunately, this is something you can fix. It may be as simple as throwing a getting started video up on your homepage or funneling users through a walkthrough after they sign up. As simple as you think it is—trust me—there are people who won't be able to figure it out.
Keep in mind that you're using and testing your own product all the time. You live and breathe it. You know everything it does and exactly how it works, but new users are seeing it for the very first time. If anything scares or confuses them, chances are you've lost their business.
Step back for a minute and purge your brain. Pretend you've never seen your product before. What might be confusing for new users? What could be made easier or more obvious? How could your product become more friendly and inviting? There's always room for improvement, so if you can't identify these things on your own, ask someone for their opinion. A fresh pair of eyes could be just what you need to improve your onboarding strategy.
Is the timing right?
Netflix was founded back in 1997 and mailed its first DVD in 1999. Nowadays, pretty much everyone and their mother has a Netflix account, but I bet you're not checking your mailbox for DVDs anymore. That's because in 2007, they started their transition into a streaming video service.
But what would have happened if Netflix started out streaming videos back in the 90s? Would it have been as successful as it is today? Probably not. Back then, the average person was still using a 56k modem. Try streaming an HD video over a connection that takes 10 seconds to load Yahoo's homepage.
Timing is everything, and that's something Netflix got right. They started by mailing out DVDs and, as Internet connections got faster, they pioneered a distribution method that wouldn't have been possible in earlier years.
Maybe your product has the same problem. Maybe it's ahead of its time, or maybe it would have been useful a few years ago. Either way, you have to make sure whatever you're producing is relevant to the here and now. Otherwise, you'll probably have a lot of trouble selling it.
At the end of the day
I hope these questions help you identify any weak points your product may have. This list obviously isn't comprehensive, so if you have anything to add I'd love to hear about it in the comments.
I hate coming across as a pessimist, but the reality is that starting a business is hard. If it were easy, we'd all be millionaire CEOs by now. So let me leave you with something a bit more optimistic. Here's a quote by Drew Houston, the co-founder and CEO of Dropbox:
"Don't worry about failure. You only have to be right once."
Photo courtesy of Tony Alter.