Episode 2 — The Idea and the Customer
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Show notes
Where business ideas actually come from: a problem somebody already has. Alex and Jordan work through who the customer is (and is not), why “everyone” is never a customer, and what the failure data actually says — a Harvard Business Review summary of the CB Insights post-mortem review found 42 percent of failed startups died of no market need, ahead of running out of cash (29 percent) and competition (19 percent). Then the practical half: talking to real people about their past behavior before building anything, and testing an idea cheaply through conversations, commitments, and the smallest honest experiment — before it costs real money.
Full episode notes & sources
Where business ideas actually come from: a problem somebody already has. Who the customer is (and is not), why everyone is never a customer, the discipline of talking to real people about their past behavior before building anything, and how to test an idea cheaply — conversations, commitments, and the smallest honest experiment — before it costs real money. New episodes every Sunday. Run the Room builds business from the very beginning — foundations first, one step each week.
Sources:
- U.S. Small Business Administration, Market research and competitive analysis (the six questions: demand, market size, economic indicators, location, market saturation, pricing): https://legacy.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis
- Thomas R. Eisenmann, Why Start-ups Fail, Harvard Business Review 99, no. 3 (May–June 2021): 76–85 — abstract and citation: https://www.hbs.edu/faculty/Pages/item.aspx?num=60200
- Harvard Business Review summary of the CB Insights review of 101 startup post-mortems (42% no market need): http://feeds.harvardbusiness.org/~r/harvardbusiness/~3/nW14cQDhvjQ/the-simple-question-that-can-make-or-break-a-startup
- Steve Blank, Customer Development — 'There are no facts inside the building, so get outside': verify by searching steveblank.com for Customer Development and the phrase 'no facts inside the building'
- Rob Fitzpatrick, The Mom Test (2013) — the three rules for customer conversations: verify by searching 'The Mom Test Rob Fitzpatrick three rules past behavior'
- Eric Ries, The Lean Startup (2011) — validated learning, minimum viable product, and the Zappos test: verify by searching 'Lean Startup Eric Ries build measure learn minimum viable product Zappos'