Your Product is Not Their Problem
By: Steve Blank
Tags: Innovation, Entrepreneurship, Customer Development, Startup, Lean Startup

There are no facts inside your building, so get the heck outside

I just had a call with Lorenz, a former business school student who started a job at a biotech startup making bacteria to take CO2 out of the air. His job was to find new commercial markets for this bacteria at scale. And he wanted to chat about how to best enter a new market.

His market research found that the concrete industry contributes between 5 and 10% of the world’s carbon emissions. So it seemed logical to him that the concrete industry was going to be one the first places to approach since it was obvious that they need to reduce carbon emissions. He believed that if used as an additive to concrete, his bacteria could strengthen it while reducing CO2.

The conversation got interesting when I asked, “How are you going to describe the product to potential customers in the concrete industry?” Lorenz began a long description of the details of the bacteria, his founders’ research papers on bacteria, the scientific advisory board bacteria experts they had assembled, how the bacteria was made at scale in fluidized bed reactors, etc… This went on for at least ten more minutes. When he was done I asked him, “So why should anybody in the concrete industry care? Do you really think they’re looking for bacteria made in fluidized bed reactors? Do you think there are a significant number whose number one issue is to buy bacteria? Do you know what if any of the features you mentioned actually matter to a potential customer?” There was silence for a moment. And then he said, “I don’t know.”

I wasn’t completely surprised because as a young marketeer, I made this mistake all the time — thinking that my product was a solution to someone’s problem — without ever understanding what problems the customers really had. And that I needed to have all the answers when in fact I didn’t even understand the questions.

I suggested that perhaps he should get out of the building and actually talk to some large-scale concrete suppliers and rather than starting with what he wanted to sell them, try to understand what their needs were. For example, how were current and upcoming green building regulations on CO2 emissions affecting the concrete industry? How are they solving that problem today? (If they weren’t solving it, it may not be a problem they’ll pay to solve.) What was the current cost of low carbon concrete? How much would they have to charge to be competitive? Were there specific use-cases that made sense for initial adoption/pilots? What additional benefits could bacteria as an concrete additive make (ie. greater strength, crack healing)?

We talked for a few minutes more and by then I could see the lightbulb going on over his head when he said, “I think I got my work cut out for me.”

Lessons learned

Your product is not someone’s problem

Start with a deep understanding of a customer problem or need before you start pitching your solution

Ask customers how they solve the problem today

Understand future regulations that might change your customer’s priorities or challenges

Steve Blank writes about how to build a successful startup at www.steveblank.com.