How to diagnose your riskiest assumptions

Most startups fail because they run out of either time or money.  You can significantly increase your chances of success if you save your time and money until you are sure that you are pursuing a solid business model.  And the best way to make sure your business model is solid is to pick out at least 5 of your riskiest assumptions and objectively test them as if you were investing in your own venture.

So how do you find the riskiest assumptions in your business model?

First, you need to create your assumptions.  Whether you are using a lean canvass or a business plan, you need to lay out your vital assumptions about the business.  Here’s a brief list of questions you need to be able to answer about your business model.  Let me know if you think I should add anything.

• Customers – Who are your customers? What do they do for a living? Where can you find groups of them? How many of them are there?
• Problem – Have you identified a migraine level of pain for your target customers?  Are they currently doing something to try and solve it?
• Solution – Will your solution solve your customers’ problem?  Are they willing to pay your designated price for your solution?
• MVP – What is the Minimum Viable Product for which your customers will pay?
• Competition – Who else is providing this solution? What is your competitive advantage?  What about your solution makes it difficult for your customers to leave?
• Sales channels – How will you sell your product/service? Online? Inside sales? Outside sales? Distribution?
• Supply – How will you produce your product or deliver your service?  What sort of infrastructure or inventory do you need in order to handle 1000 customers? 10,000 customers?
• Human Capital – Do you or someone on your team have industry expertise in this market? Do you or someone on your team have the necessary leadership skills to lead this company in terms of product development, sales, marketing, financials, etc.?
• Financials – How many customers do you need until you achieve target profitability? Is that a realistic number with your available resources? What are your key drivers of revenue?
• Legal Issues – Do you have the necessary intellectual property rights to operate your business? Have you and your team come to an agreement on equity and responsibility distribution?

Next, list each of your assumptions as a line item.  Then, go through each one and write down two numbers.  The first number is on a scale of 1-5, rating the possibility that your assumption might be wrong.  This is like an inverse confidence rating.  So the less sure you are about it, the higher the number.  The second number is on a scale of 1-10, rating how detrimental an incorrect guess on this assumption would be to your business model.

Go down the list of each assumption and write down the two numbers.  When you are done, go back through one more time and multiply the two numbers to get your overall risk assessment.

Here’s a sample layout I created for a company that offers discount fuel cards for truck drivers.

Assumption	Possibility of wrong assumption (1-5)	Level of Impact if you are wrong (1-10)	Total Risk Level
My target customer is the owner operator of a tractor trailer truck rather than the owner of a small or medium fleet	3	9	27
Their problem is that they need to buy as much gas for their truck as large fleets, but they don’t get the fuel discounts that group purchasing affords	2	7	14
There are no good options for fuel discount cards that allow owner operators to save 10 cents per gallon or more	5	5	25
Owner operators of trucks get information on new products from trade periodicals and online message boards	5	3	15
The average discount fuel card that owner operators use saves them 5 cents or less	4	3	12
Less than 50% of owner operators use any discount fuel card	4	8	32
We can sell discount fuel cards to owner operators through an inside sales force over the phone	4	8	32
We can sell discount fuel cards to owner operators through an online presence	4	4	16
We can partner with an existing fuel card underwriter to create our card and discount program	5	10	50
We have the necessary team to understand the trucking industry and deploy this product	3	4	12
We have the necessary team to supervise an inside sales operation	3	4	12
We understand what is required on the backend to process applications, approvals, and customer service	5	5	25
We need 500 customers to achieve our minimum revenue goal	1	3	3
Each inside sales representative will sign up 20 new accounts per month	4	5	20
Our team is on the same page about equity distribution, roles, and responsibilities	4	5	20
There are no regulatory hurdles for us to offer this product to truck drivers	5	8	40

Once you go through each of your assumptions to the categories outlined above, you can prioritize them based on the total risk level number.  Now you know which assumptions to test and validate.

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12 Tips for Successful Customer Development Interviews

I love this piece by Giff Constable outlining his 12 Tips for customer development interviews.  Giff does a great job of helping you understand both your goals and mindset when trying to figure out a problem worth solving and a solution that customers are willing to buy.  Here’s a quick summary:

1. One person at a time – It’s always better to interview individuals rather than focus groups.  Interviewees by themselves are going to be a lot more honest and less likely to be influenced by others the way they can be in a focus group.
2. Know your goals and questions ahead of time – Figure out which assumptions about your business model you want to test through customer interviews.  Before you start, have an idea of what it will look like when you prove or disprove your assumptions.
3. Separate behavior and feedback in discussion – Separate out your problem interviews from your solution interviews because your goals for gathering feedback are going to be different in the two scenarios.
4. Get psyched to hear things you don’t want to hear – You want to seek responses that disprove your assumptions.  That’s the only way you are going to get honest feedback on whether your idea is worth pursuing.
5. Disarm “politeness” training – During your interviews, create an environment where people can give you negative feedback. Your goal is to find out the truth, not to try to sell something nobody wants. One way to create this environment is to follow #4 above.
6. Ask open ended questions – You’ll get a lot more value out of interviews if you let people talk about their preferences, rather than limiting their opinions with yes/no questions.
7. Listen, don’t talk – this one is pretty self-explanatory.  You should be listening at least 10 times as much as you are talking.
8. Encourage without influencing – Don’t just clam up and expect them to fill up the entire conversation on their own; encourage their thoughts with comments like “I see,” “interesting,” and “tell me more about that.”
9. Follow your nose and drill down – Whenever they say something that peaks your interest, prod further with questions.
10. Parrot back or misrepresent to confirm – When they say something important to the interview, repeat it back to them to make sure you understood it right.  They can either correct your misinterpretation or expand on their idea.
11. Ask for introductions –Use each interview to gather leads for additional interviews.
12. Write up your notes as soon as possible – This will help you ensure that you don’t lose valuable content.

Customer interviews are a staple in defining your product/market fit.  Follow these 12 guidelines to make sure you are spending your time wisely. Let me know if you have any tips to add in the comments.

I run from danger, and other dumb assumptions entrepreneurs make

What does it feel like to have a terrible business idea? The kind where people laugh behind your back as you walk away? Take a moment. Think about it.

 

It actually feels a lot like having the world’s best business idea…right up until the moment when the market tells you that you don’t have anything anyone wants.

 

I meet with a lot of founders that don’t have any idea how to figure out whether they have the world’s best or dumbest idea.

 

After starting a number of companies of my own, and meeting with entrepreneurs at all stages of the startup journey, I’ve come to believe that the ability to differentiate good ideas from bad ones and massage bad ideas into profitable companies is like being physically fit. The vast majority of us aren’t born fit. We have to train, practice, and push ourselves to get good at it.

When I was in high school and college I completely ignored all forms of exercise. But I was lucky, I was a pretty skinny kid. People would always say to me, “are you a runner? You look like one!” and it happened so frequently that I came up with a funny quip back. I would say, “I run from danger!…and that’s about it”

 

So one day, I was walking my dogs, and I thought to myself, “Self, if there was danger on this street, could you in fact run from it?” I decided to test my assumption and I took off running. I sprinted as fast as I could. I sprinted for two whole blocks until I had to stop and throw up. And after I was done, I thought, “Man, danger would have kicked my butt.”

 

That day I learned that it’s pretty easy to make bad assumptions. Just because a lot of people tell you something is true — that you look like a runner — doesn’t necessarily make it so.

 

Your startup idea is no different than my perceived ability to run from danger. The only way to prove or disprove your idea’s likelihood for success is to test your assumptions. And whether or not this current idea makes it, you’ll be developing the muscle memory to validate future ideas.

My First Forbes Article: The Good Side of Failure: Three Painful, but Worthy, Lessons

When you read about startups in the news, the articles usually cover one of three events in a company’s lifecycle: launching their service or product,  raising an investment round, or selling their business.  This paints an unrealistic picture of what startup life is like because these three events do not represent the average lifecycle of a company.  In fact, the vast majority of startups fail. They lay off all their staff and shut down their site. Few of these stories are ever reported.  And when they are, the article is usually a short piece covering the email the company sent to it’s customers or employees describing how the wrap up will take place and ending with “none of the leadership team could be reached for comment.”

We lose so much value as a community when we let these stories go.  There are so many valuable lessons hidden behind their shuttered doors.  And their failures can save a lot of time and money for future entrepreneurs who are willing to learn from their mistakes.

So I’ve started a series of interviews exploring failed startups.

This is my first interview from Forbes.com: The Good Side of Failure: Three Painful, but Worthy, Lessons

A few years back I was doing an interview for a business paper and when the reporter asked me if I had a business motto or phrase to live by, I replied “Fail quickly!”  She looked at me funny and I quickly realized that what she heard was “Go out of business quickly” but what I meant was “Failure is completely normal. It happens to all of us. And the only thing you can do is minimize the consequences to your business by realizing that small failures are going to occur early on and saving yourself a lot of time and money from going in the wrong direction.”

I hope this column helps you identify failure before it happens by understanding that it is a normal part of startup life.

Pick partners and employees based on enthusiasm rather than skill

This weekend was very special for me.  A good friend asked me to officiate her wedding.

The whole experience was incredible.  Part of my official duties meant that I was sworn in as a judge for the day.  As an attorney, any shortcut you can find to becoming a judge is pretty exciting.

Saturday was the big day. We stood in an intimate room of friends and family and I carefully performed a very personal ceremony blending two existing families.  I had practiced for days.  I met with the bride to go over the general outline and ask for her input.  I met with the groom and their 3 kids to practice everyone’s speaking roles.

The ceremony I created included stories of how the bride and groom found each other, participation from family members sharing their best wishes, and a blending of families presentation where the bride and groom promised to be there for their existing and new kids alike. The kids (all under 7) promised to support a new brother or sister as well as mom and dad.  It was awesome.

After the ceremony, several people came up to me and told me how much they enjoyed the ceremony, and then told me stories of bad officiants at either their wedding or ones they had attended.  They described officiants who riffed their personal message in a very awkward fashion, individuals who got a lot of personal information about the bride and groom wrong, and ceremonies that were too rigid and impersonal.

When my friend first asked me to do this, I was very confused.  Didn’t she want someone with experience?  Wasn’t she worried that I would mess up this very important day?  She was always so confident in me.  And after all those conversations at the reception, I finally understood.  This wedding and the selection of an officiant was no different than putting together your company.  It’s always better to select employees and partners based on enthusiasm rather than skill.

I’m not saying that skill is of no importance.  There needs to be a minimum threshold.  My friend had seen me emcee business events and she knows that I write and speak.  And she was willing to accept the fact that I would figure out how to do the rest because I cared so much about her and her special day.  In retrospect, I probably spent a lot more time preparing, thinking about what I was going to say, and practicing than someone who performs hundreds of weddings per year.

If you are thinking about hiring someone or brining on a partner, make sure they have the same passion for your product/service that you do.   It’s much easier to pick up skills than attitude; and if you can find someone passionate enough about your venture, they will do whatever it takes to learn the skills they need to do their job.

This event also made me realize that experience is a very relative term.  Because I had never performed a wedding ceremony before, I wasn’t tied into an existing routine and could figure out something new.  I read a lot of wedding ceremony scripts, I watched a lot of wedding videos, and I spent some time reading forums about meaningful moments in wedding ceremonies.  My lack of experience actually proved to be a strength because, as many of the attendees pointed out afterwards, the ceremony was more intimate and personal than a traditional wedding.

If a new hire lacks traditional “experience” in performing a certain job but they have the minimum skills and outstanding enthusiasm to perform the tasks, they will likely bring a fresh perspective to an existing system or process.   They might help you evolve how it’s always been done before to a new, more efficient and impactful process.

3 Things You Should Never Do to Get a Customer

(Part 2 of 2)

In my last post I wrote about the importance of First Customers and the 5 things you can do to find these early adopters. But not all early adopters are created equal and you should limit what you are willing to do to earn a customer. If you don’t establish these parameters, some first customers will take advantage of you. Giving in to your excitement too early can poison your organization.

So here are three important rules for you to follow when pursuing First Customers:

1. Never give your product away for free.

It seems obvious, but this can actually be very tempting. You desperately need First Customers. You think your product can eventually sell for $100 per use or unit if you could just land those first users. You just know the great testimonials or referrals will follow. Or maybe you want feedback on your product that only customers can provide. Believe me, you’ll find a million ways to rationalize giving your product away for free, including the naïve assumption that you will one day convert the account to a paying customer.

Here’s the problem: You need First Customers to figure out if you have a product/market fit, i.e., if the marketplace has a need for your company, and unfortunately free customers aren’t going to help you figure that out. Just because someone takes your product or service for free doesn’t mean they would be willing to pay for it later. In fact, the opposite is probably true. Think about how many Facebook or Twitter users would stop cold turkey if they had to pay even a nominal fee on a monthly basis.

Giving away your product or service for free will only delay the time it will take you to figure out if you have achieved a product/market fit and extend the time and money it will take to find a successful business model.

2. Never perform tasks outside your expertise.

Some of your early prospects will say, “I really like what you are trying to do with your company, but I would love it if your company did x or y”.  One of these prospects might even be a really big fish.  But getting distracted will only cause damage to your company.

If you start performing tasks outside your initial business scope or try to make your product fit a very particular set of requirements for a single customer, you will likely a.) Do a bad job because now you are operating outside your area of expertise and b.) Waste valuable time and resources for a side project while taking your eye off the ball of finding your First Customers and building a successful business model.

First customers should help you find a product/market fit and build your company. Anything else is a distraction to be avoided.

3. Never put up with overly demanding clients.

No paying customer is so invaluable as to justify a never-ending string of requests that hinder your ability to serve other clients. A very small percentage of your First Customers are going to be emotional vampires. They will have complaints and suggestions and demands that far outstrip the amount they are willing to pay.

You must be willing to fire these customers. Your emotional well-being is a valuable commodity to your company and it is simply too important to spend on the demands of problem customers. Instead, use the same valuable time and resources to find bigger and better customers.

Finding a product/market fit is the single most important step in proving your business model. The best way to confirm a product/market fit is to have First Paying Customers with reasonable expectations and a need for your expertise.

5 Ways to get your First Customers

(Part 1 of 2)

Do you know the difference between a startup idea and a startup company?

Paying customers.

I’m not talking about the .1% of startups out there like Facebook or Instagram that raise millions of dollars in venture funds and build up a user base of millions of people before they need to make any money.  I’m talking about the 99% of companies that bootstrap, raise 500K or less in investment dollars and have to figure out how to generate revenue in order to stay in business.

These early adopters are a very special breed and they are EVERYTHING to your business.  They don’t need testimonials. They understand that errors will happen.  They are patient, interested in your success, and most importantly, willing to pay you for your product or service.  The number of early adopters you need may vary.  If you sell a 100K product or service, you may only need one or two.  If you sell something for $1, you may need hundreds or thousands to prove that the marketplace is interested in your product.

Early adopters are more commonly known as your first customers.

These are the five things you need to do to find your first customers:

1.    Use every relationship you have

It’s hard enough to make cold calls, but it’s extremely difficult to sell new and innovative products and services through cold calls.   You need to meet with people that have some connection to you, no matter how small.

When I started my first company, my clients were supposed to be businesses. I sat down and made a list of everyone I knew who owned a business and there were only five names on the list.  This was very discouraging. But I decided to grow my list through existing relationships, so I met with almost everyone I knew who might have ties to the business community and I asked each of them to introduce me to five business owners.  I was surprised at how willing people were to help.  I quickly grew my list of prospects and even snagged a few early customers.

2.   Stalk and Awe

There are always going to be potential customers that are totally out of your reach but would make an incredible early adopter.  This is where I like to employ my signature “Stalk and Awe” campaign.   First, I stalk them.  Not the kind of stalking that’s an unwanted, obsessive intrusion on someone’s personal space that can get you arrested.  I’m talking about a kind of stalking where you find multiple points of contact and references for your meeting.  Find anyone and everyone who might have a connection to the person you want to meet and ask them for an introductory email or a warm up call.  The harder this person is to reach, the more recommendations you will need.  Next, send a letter of introduction and follow up with a call. Finally, find opportunities to attend events where they will be so that you can “run” into them. Networking and business events only. I’m not suggesting you crash a wedding or join their gym.

If the first part of the campaign works, and you actually get a meeting, you now have to Awe them.  Do a lot of research on the potential problems in their business.  Spend the first half of the meeting just asking them questions about potential pain points, and try to offer something of value completely independent of your business.  If you bring enough value to the table, and awe them, they will be a lot more interested in you and your company.

3.   Accentuate the Positive

When you are talking to potential customers, they might have all sorts of questions that don’t have great answers.  How many other customers do you have?  How long have you been in business?

Try to answer their questions by accentuating the positive about your company.  How many other customers do I have?  That number isn’t as important as the fact that of everyone that’s tried our product or service, 95% would recommend it to their friends.

How long have I been in business?  I have years of experience in this market segment, but I recently chose the opportunity to bring the same quality service that I offered through such and such big company at a much lower rate.

4.   Create Partnerships for Credibility

No one has ever heard of your startup. You have zero brand credibility.  So why not use the credibility of an existing trusted brand to get your first customers?  Find a group or a person that your target customers trust.  This could be someone that is already providing them with services or just a well-known name.  Offer this potential partner a percentage of certain kinds of revenue.  Offer them a sponsorship agreement.  Offer to let them be a customer for a significantly discounted rate in exchange for a public endorsement.

5.   Become an expert

When you don’t have a track record of happy customers the next best thing is expertise in your chosen domain.  If you can get your early customers to trust you as a knowledgeable resource in your subject area, they will buy from you. The key here is not to fake it – before you start proving your expertise, you have to actually develop it.

Once you’ve developed your expertise, you can express it through any media resource.  You can tweet, facebook, blog, guest blog, etc, to get your message out.  You can write a white paper and email it to your target clients.  You can put together a “lunch and learn” seminar and invite your prospects to learn about your subject area.

There are many ways to prove expertise in a particular area, but it is very important to fight the urge to spend all of your communications trying to sell your company.  Use your platforms to try to help people and your first customers will follow.

First customers breathe life into your startup.  Now that you know the five things you must do to find them, I’ll caution you against doing anything and everything to please them.  In fact, in my next post I’ll cover the three things you should never do to sign up your first customers.

Are you an Outdoor Kitty? – A short quiz.

My company has an onsite project for a major client.  A few months ago, the project manager was out on vacation and I stepped in to fill his role for a week.  It was a drastically different week from those I had become accustomed to as an entrepreneur.

I didn’t leave the client’s office. I didn’t take any sales meetings.  No networking events. Just internal meetings, helping internal customers with their requests, and a lot of paperwork.

On Tuesday of that week, a member of my team came into my office and asked me if I was doing ok.

Me: Yea, I’m doing fine, what do you mean?

Her: I’ve seen you over these last two days.  You look like you’re trapped against your will.  You longingly watch everyone that passes by your office.  And I feel like you could make a run for it at any minute.

Me: That’s funny.  No I’m fine.  You really see that?

Her: Diana, you’re an outdoor kitty!  You’re just not going to do well in an indoor environment.

I thought her remark was pretty funny, and after lunch I did some more research on outdoor kitties and found this great description on a blog:

“Confident cats, particularly those with prior outdoor experience, may well vote for freedom and its attendant risk over the alternative – a long, but boring, healthy life of incarceration.  For cats of such persuasion, it seems that the New Hampshire state motto – “Live Free or Die” – might easily apply.

For those cats that must remain indoors all the time, or even most of the time, it is an owner’s duty to make sure that his cat has copious daily opportunities for exercise, games, fun and interaction with family members.”

The more I think about it, the more the moniker applies.  Once you realize that you are an entrepreneur, there is NO GOING BACK.   So I wrote this short quiz to help you figure out if you are meant for a life of adventure and risk or something more safe and predictable.

In the spirit of Jeff Foxworthy, you might be an Outdoor Kitty if:

• You feel claustrophobic in a traditional office setting.
• Regular working hours don’t apply to you because you are always hunting.
• You never, ever pack your lunch.
• You aren’t afraid of failure because you can always land on your feet.
• Indoor kitties think you’re crazy.
• You’re comfortable in an “eat what you kill” environment.
• You’ve found that you are much more productive and can hunt bigger game in packs.
• The only thing you fear is doing the same thing every day…oh..and also coyotes.

Hope this little exercise has been helpful.  Happy hunting to all you Outdoor Kitties!

Why you can’t write a business plan for being a good basketball player

When I was a sophomore in high school my family had very little money.  My dad was a mechanic with dreams of starting his own business and my mom was fresh out of technical school working as an entry-level programmer.

I knew I wanted to go to college, but I also knew that my family couldn’t afford to send me to a good school.  Heck, we would have had trouble just paying for housing and a food plan.  I needed to get a scholarship.  I checked out books on scholarships from the library, talked to a few seniors, and decided that my best chance of going to a good school on a full ride was some sort of a sports scholarship.

I was not an athletic kid.  I had good hand-eye coordination, but I didn’t really run.  In fact, I had never run a full mile … EVER.  Not even in P.E. classes.  Just couldn’t do it.  So after narrowing down my choices, I picked basketball.  I don’t really remember how I picked it, but I think it had something to do with having a basketball goal in our driveway.  I had never really played basketball on a team, let alone tried out for any team — but how hard could it be?

I practiced shooting for a few weeks and got pretty good; I checked some books on basketball out from the library; and my cousin and I played a few games of NBA Hoopz on his Playstation.  I was ready.

The first day of the two-day tryouts, I wanted to give myself a little extra boost.   Unfortunately, the only nutritional knowledge I had at the time came from the “Milk does a body good” commercials on TV, so I drank a full glass of milk that morning and another cup of milk at lunch.  That first day was really tough.  There was barely any shooting on the first day, but there was plenty of running.  Sprints over and over from one end of the court to the other.  I got a huge cramp pretty early on in the practice and had to spend most of the tryout in the trainer’s office trying to understand what a muscle cramp was.

The next day, I knew what I had done wrong.  I clearly had not consumed enough milk the previous day.  So that morning I drank two and a half glasses of milk before school.  And then — just for good measure — I drank two more pints of milk at lunch.

Needless to say, the second day of tryouts didn’t go as I had hoped.  I was exhausted even earlier in the workout than the first day.  During one of the running drills I felt my mouth start to fill up with a heavy mucus-like substance.  I thought I was foaming at the mouth so I went back to the trainer’s office.  He asked me what I had to eat that day and quickly diagnosed the problem.

During that second day of tryouts, the coaches finally ordered up some shooting drills.  Of course, I never got the chance to showcase my well-honed skills because I was again stuck in the trainer’s office.

Out of what felt like hundreds of girls who tried out for a spot on the Varsity, Junior Varsity, B Team and C team, I was one of TWO cut from the tryouts.  Word about my milk consumption got around pretty quickly, so I was both embarrassed and disappointed that I now had to figure out a different way to get a scholarship to college.

As silly as this episode seems, I see countless entrepreneurs repeating my mistake on a regular basis.  They choose to start companies in industries in which they have no personal expertise.  They think they can just read the market research, talk to a few people, and begin building their product.  What they don’t understand is that launching companies outside your area of expertise can be filled with minefields that you never knew existed.

I thought my biggest challenge was going to be making baskets.  But I didn’t even get to shoot the ball. There were other parts of being a great basketball player that I didn’t know I needed and that the experts I talked to thought were so obvious, that they didn’t even bother to mention basic fundamentals like running, endurance, or nutrition.

If you are going to build a company outside of your area of expertise, you need to have someone with industry expertise on your team.  And you need to take extra steps to make sure you have identified the right customer segment with a clear problem that is interested in your solution.

I didn’t try out again for basketball or any other sport.  I just thought it was impossible for me.  Instead, I was fortunate that there were scholarships available outside of sports, and got a debate scholarship to go to college.

Later in life I came to understand nutrition and built up my physical endurance.  I even started playing basketball for fun.  Now, my ability to outrun my opponents is my greatest strength.

Make sure that you turn your lack of industry expertise into a strength by spending as much time with your customer segment as possible.  Interview them, sell something to them, join them for happy hour and find out everything you can about their problems, dreams, and goals.  That’s the best way to find out whether your startup will be a good fit in the industry and save yourself some embarrassment from getting cut for something you never suspected.

Is your problem a headache or a migraine?

How do you know if your startup has identified a problem worth solving?  The trick is to never assume that every identified problem will create a successful business.  You will significantly increase your chances of startup success if you focus on solving only those problems that are causing serious issues for your customers.

Customer problems can be put into two categories: Headache problems and migraine problems.  A headache problem is a recognized annoyance that a customer isn’t willing to spend much time or money fixing.

I take my dogs on a lot of walks, and I have to pick up behind them after they defecate.  It’s annoying. And I wish I didn’t have to do it.  If you asked me if picking up after my dogs on our walks was a problem, I would say Yes! But I’m not going to spend any money on a fancy pooper scooper that I have to bring with me on my walks.  My current solution, used bags from the grocery store, works well enough, and I honestly have never gone online to look for other options.  This problem is just like a headache.  It’s annoying, but short of taking some over the counter medicine, the majority of people wouldn’t do anything else to treat it.

A migraine problem is a completely different story.  Here are the symptoms that can accompany a migraine (from Medicinenet.com):

• Moderate to severe pain (often described as pounding, throbbing pain) that can affect the whole head, or can shift from one side of the head to the other
• Sensitivity to light, noise or odors
• Blurred vision
• Nausea or vomiting, upset stomach, abdominal pain
• Loss of appetite
• Sensations of being very warm or cold
• Dizziness
• Fever
• Bright flashing dots or lights, blind spots, wavy or jagged lines (aura)

Migraines are such a serious problem, that people have tried anything and everything to decrease the pain: brain surgery, antidepressants, botox, anti-seizure drugs, chiropractic treatment, acupuncture, etc.  This is a problem worth solving.

Two days ago one of my dogs, Winston, got really sick.  He was vomiting every few hours and couldn’t keep anything down.  He kept looking at me with his puppydog eyes, trying to communicate to me that something was wrong and he wasn’t feeling well.  After about 20 hours of this without any marked improvement, I rushed to the vet’s office to get him checked out.  This was a migraine problem.  It didn’t matter what tests the doctor wanted to run, or what prescription he wanted to issue, I would pay anything and everything to make him feel better.

When you are talking to potential customers and trying to figure out if they identify with the problem you think is worth solving, make sure you are asking the right questions to determine whether you’re solving a headache problem or a migraine problem.  These questions can include:

• On a scale of 1-10, how seriously does this problem affect your life?
• What do you currently do to solve this problem (note: if they don’t really have a current solution, then it’s not a real problem)
• How much would you pay to solve this problem?
• What other solutions have you already considered? Tried?

What have you done in your startup to figure out if you were solving a headache problem or a migraine problem?

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