Lean Business Scorecard: Desirability
#1 Do people want your Business Idea?
This is Part 1 of the 4-part guide where we focus on Desirability.
- Overview
- Part 1 — How Desirable is your idea?
- Part 2 — How Viable is your idea?
- Part 3 — How Feasible is your idea?
- Part 4 — How Responsible is your idea?
- Download the Lean Business Scorecard (download link)
Always assess Desirability first
When assessing a Business Idea, we must always start by assessing Desirability, because — as we established in the overview section —a failure to address their customers’ needs and find product-market fit with a solution is the first hurdle that most business ideas fail to get past.
Almost every Design, Product and Startup-focused book in existence starts by setting out the importance of focusing on the needs of customers first and foremost, so why, if there is so much material out there that explains that businesses fail for this reason, do people get this consistently wrong?
There are 2 reasons for this.
- Our lack of awareness of subconscious biases, and
- Our lack of mitigating strategies to outsmart them
Falling victim to biases
The first reason that we fail to truly understand and address our customer’s needs is that most of us love to jump straight to solutions when confronted with a challenge.
We go around spending all day dreaming up solutions.
We obsess over them.
It’s known as Solution Bias.
It means we risk not understanding our customers or their problems and start coming up with solutions based largely on assumptions.
The second reason we struggle to find Product-Market fit is that once we get an idea of a solution into our heads, we then have a tendency to seek out information that supports our ideas and we tend to avoid or reinterpret information that could contradict what we think.
We fall victim to something called Confirmation Bias.
Solution Bias and Confirmation Bias are very dangerous when combined.
Together, they are powerful subconscious forces that shape our behaviours and stop us from seeking out evidence that would actually be useful to build a business.
It’s these two biases that give people a false sense of confidence in their ideas and cause them to waste money chasing ideas no key wants or needs.
Many ‘Stealth’ Startups — even those with millions in funding and billion-dollar valuations — have fallen victim to this way of thinking.
Months and sometimes years are spent without any form of customer testing. Then, when the “big reveal” takes place, they are met with a lukewarm “so what?”.
By obsessing over the solution rather than the problem, you end up ignoring evidence that could contradict your assumption and you lose sight of your customers, what they are trying to achieve and the biggest challenges they face.
The Desirability section is therefore the most important and biggest part of the entire Lean Business Scorecard — use it as a reliable and repeatable strategy to hack your hardwired biases and help yourself first obsess over the problem before setting out the value your solution offers.
Obsessing over the Problem
Instead of falling in love with the Solution, we should always start by falling in love with every aspect of the Problem and looking for evidence that we are solving the right problem or challenge for our target audience.
Once we’ve cracked the problem, it’s only then we examine the solution for signs that it has achieved Product-Market Fit.
A solution can only achieve a market fit if the problem it solves truly needs addressing
Let’s look at the Problem section of the Lean Business Scorecard
This part of the Desirability scorecard has 3 sections.
Problem Overview
In this section of the Scorecard, I’m looking to understand
- Who your target audience is
- What their job to be done is, and
- The challenge or problem that is getting in their way
Your target audience are the group of people who will be paying you something of value in return for the value your product or service provides to them.
For example, in the case of a company like Airbnb, it’s people with homes and apartments to rent out AND people who want to travel away from home.
Their job to be done — an idea coined by the late Clayton Christensen — is what they are trying to accomplish. Note that it is rarely, if ever, your customer’s job to be done to use your product and service.
Instead, your customer buys or ‘hires’ your product or service to help them get their job to be done completed successfully.
For Airbnb, people with homes and apartments like to get away and travel to different places, both for work and pleasure. The job to be done is not to ‘use Airbnb’ but to to ‘get short term rental income’ whilst they ‘get away to a different city or country’.
Their current challenge is something that gets in the way of their job to be done. It could be something that confuses or frustrates them. It could be something they are completely unaware of. In our Airbnb example, people who travel away from home often only have the option of an expensive hotel to stay in that offers a homogenous experience with little connection to the local culture. They yearn for more.
Business ideas that lack Product-Market fit usually do so because they lack a Market of people with a common Job to be done that also have a big enough problem or challenge in their way.
To bring these ideas to life and learn how to use the Problem section of the Scorecard, let’s do a teardown of one of Airbnb’s earliest pitch decks (or at least a reproduction of one) to see how much evidence they had in 2008.
Problem Teardown
Take a moment to scan through the slides below (and please ignore the competitive advantages section, it’s a reproduction after all).
Whether you are learning how to use the Scorecard by assessing the Airbnb pitch deck or reviewing your own materials for other business ideas, start making notes of any specifics you have around who the customers are, what they are trying to do and what gets in their way.
Use each statement in the scorecard to hunt for evidence.
See if you can pick out or articulate any information that helps describe the target audience, job to be done and current challenge.
For example, in the Airbnb pitch deck, I can see these 2 slides that seem to describe them.
Based purely on looking at the slides, I wrote down the following statements in the Problem section of the Scorecard.
Don’t worry about getting the wording on this perfect, just noting down the general idea is fine at this stage because it’s the score you give each statement that ultimately helps you know where to focus your time and energy.
Make sure you spend the bulk of your time considering the scoring, not the wording.
Scoring the Problem
We learned in the overview article that we evaluate how much evidence we have for each statement by looking at how far up the Ladder of Evidence we have travelled and how strong the evidence is.
Evidence is paramount.
It doesn’t matter how great you think your solution is if you don’t have reliable evidence of the problem or challenge you’re addressing for your customers. So always write down and score the Problem before moving on to the Solution.
Here’s the scoring system we will be using.
For each statement that you have written down to describe the Problem, look through your evidence and see how strong it is.
Has the problem been qualified or quantified in any way?
Problem / Level 1
Everyone has to start somewhere, but if you haven’t actually spoken to anyone about your idea then you have no evidence.
Problem / Level 1 / Typical Evidence
For Level 1 it is unlikely you will see much research, evidence or genuine attempts to speak to and empathise with a customer.
Problem / Level 2
To go from a hunch to the next rung up the ladder, from a 1 to a 2, you’ll need to get out of the building to speak to people, whether that’s virtually or physically. I look for qualitative evidence here. Evidence that shows that you’ve spoken to a sample of your target audience to broadly understand what it is they’re doing when they experience problems or challenges. You’ll need to understand what’s getting in their way and why that might be happening.
Problem / Level 2 / Typical Evidence
Typically, for ideas at Level 2 you will find evidence of speaking to around 5–10 people that match a Customer’s profile. I find in these case that you’ll see common patterns of “jobs to be done” emerge alongside any common problems or challenges that appear along the way.
This shows me you have qualified potential problems.
Problem / Level 3
To get to the next level of evidence, you’ll need to show that you have validated the biggest challenges by gathering quantitative evidence around the key problems. What proportion of your target audience experiences the same problem? Do you understand why that’s happening? What’s the underlying driver of this behaviour or experience?
If you show me evidence of having tested this with a representative sample of your audience, you’ll get 3 out of 3.
Problem / Level 3 / Typical Evidence
It’s hard to give an exact number here, but I want to see evidence that goes toward proving that you have quantified the size of the potential market of people who have the same problem.
This is how I scored Airbnb’s description of the Problem.
Based purely on the slide deck, I’m afraid Airbnb are really at quite an early stage as there is no evidence that they have qualified or quantified the actual market of customers.
To be fair they have done some market research on the theoretical market size, but it’s just theory with little to truly qualify or quantify the number of people with the problem they claim to have found.
What your Problem scores mean
For the 3 statements that describe the Problem, there are a total of 9 points you can score for the Problem section.
Problem Score / 0–5
Recommendation for focus
If you’re thinking about solutions at this stage, pause. You lack strong evidence that you’re solving the right problem. Go back and make sure you truly understand your audience, what jobs they’re trying to get done and the challenges and pain points they face along the way. Make sure you understand the Landscape of Opportunities before proceeding. My advice is to get out of the building and genuinely develop empathy with your customers by speaking to them. Don’t mention your solution if you have one, that’s signs of your confirmation bias creeping in.
Problem Score / 6–8
Recommendation for focus
You’re onto something, you have qualified the types of problems your audience has and now have a good understanding of the Landscape of Opportunities you could address for your customer. You now need to quantify which of the problems you’ve found is the biggest.
Problem Score / 9
Recommendation for focus
You have strong evidence that you have the right problem to focus on solving. A problem that could have a market of paying customers if you have the right product. Your focus next should be on finding the best solution to address that problem.
Once you’ve established you have a market with a problem worth solving, let’s look at the evidence you have around your solution.
The value a solution offers
What often surprises people I coach when they look at the Solution section is that it is one of the smallest parts of the entire scorecard.
It’s deliberately small to ensure that people can describe what the most valuable part of their business is and back this up with evidence.
I’m not interested in a massive prioritised backlog.
I’m not interested in any bells or whistles.
I’m looking to see if a business understands
- Their ‘Killer’ feature — what the most important feature of their product or service is — the ‘sticky’ part that customers keep coming back to use
- The value they unlock — What does this killer feature allow their customers to do that they couldn’t before?
These are the 2 most critical parts of any solution because if you understand these 2 components of a solution, it helps you to build the leanest possible operation around the most valuable parts of your product or service.
Knowing what’s most valuable to your customers also helps you know what key metrics to measure to help you improve your customer experience over time and keep delighting your customers.
Do you have a killer feature?
Think of features you use a lot.
For me, I often like to ‘pin’ a picture that I like the look of on Pinterest.
The killer feature is the “Pin” button that allows me to browse and then pin photos carefully curated by others from all over the internet about homes, cars, fashion and food in one place.
The number of times I pin a picture per month or week tells Pinterest how sticky their content is for me and is indicative of how good their algorithm is for the imagery they curate for me.
As the graph below indicates, when customers get value from a certain ‘Killer’ feature of a product or service, like my Pinterest ‘Pinning’, they will keep coming back to use it.
The rate at which they use that feature may diminish over time, but if that rate of repeated usage reaches a steady state that’s above zero, you know you’re onto something of genuine value.
Unlocked Value
The second question around the unlocked value that a killer feature is best described by Jared Spool’s Backup Question.
“Let’s say we do a great job on this. A year later, what great things have our users accomplished because we delivered a great design?” Jared Spool
It’s a brilliant question because you can actually work this out without designing any solution at all and you do it simply by understanding your customer’s job to be done and their challenges today.
Going back to the Pinterest example, the value I get from Pinterest is twofold.
Firstly, all the imagery that Pinterest curates on my behalf based on my ‘pins’ does a pretty good job of inspiring me every time I visit the site or app. The quality, variety and level of creativity of the imagery is something I haven’t found elsewhere.
Secondly, I often refer back to the boards I create from all these great images for inspiration. It’s like a second brain filled with high-quality creative ideas grouped into set themes. Yes, I can save photos elsewhere, but there isn’t such a ready supply of great images alongside an image-storing repository.
So… what do your customers struggle with today?
Your solution should allow them to achieve something they can’t right now.
When I look at our Airbnb example, these are the slides that I focus on.
Scoring the Solution
Your Solution can be scored in the exact same way as the Problem.
Both benefit from qualitative and quantitative evidence that can help you get around your Confirmation Bias if you have a preconceived solution in mind.
Solution Scoring Guide
Here are the scoring suggestions for solutions…
Solution / Level 1
Similar to the Problem, everyone has to start somewhere, but if you haven’t tested even a single solution with Customers, you’re at a 1.
Solution / Level 1 / Evidence to look for
No concept testing conducted. Any mention of ‘Stealth Mode’ is usually a warning sign that little rigorous testing has been done.
Solution / Level 2
To scale the first rung of evidence for the solution, you would ideally test several concepts with several potential customers to allow them to compare and contrast each solution. People who have Confirmation Bias tend to only test their preconceived solution because they are looking for self-confirming evidence rather than putting their idea to the test against other solutions that may contradict their bias.
Taking a “compare-and-contrast” approach to testing several concepts at once is a much more reliable way to test whether a particular idea is the most desirable because it forces you to challenge your personal biases.
Solution / Level 2 / Evidence to look for
Similar to understanding the problem, I like to see evidence that several concepts have been tested with 5–10 people that match your Customer’s profile helps to get a broad range of feedback on several concepts and shows me you have qualified potential solutions.
Solution / Level 3
To score 3 points for a potential solution you would ideally show that one of the winning concepts you tested that delighted customers at a small scale prove to be the most desirable at a large scale.
Solution / Level 3 / Evidence to look for
Depending on the size of your target audience, it’s hard to give an exact number here, but I want to see evidence that you’ve quantified which solutions solve your market’s biggest problem in the most effective and desirable way.
I used 100 customers as a rough rule of thumb, but adapt this to be more statistically significant if you have a very small or very large target audience.
Here are my scores for the Airbnb example.
From the evidence presented in the deck, Airbnb has scored a total of 2 points out of a possible 6. At this stage in their journey, they failed to present any evidence beyond a hunch.
As it turns out, for those that know the Airbnb story, the company almost failed early on in their journey because practically nobody was booking host homes on the platform.
One of the major problems potential hosts were having is that they were unable to take attractive photos of their properties.
Visitors to the website scrolled through host home listings and simply said “That looks like a dump, I’d rather stay in a hotel” and then bounced.
So one of the first Killer features Airbnb brought in was to get professional Home Photographers to stage and shoot homes and apartments to make them look more desirable.
The legend goes that by bringing this magazine-like level of quality to the imagery, home bookings took off and the fortunes of the Airbnb team went with them.
What your Solution scores mean
There are a total of 6 points you can score for the Solution section.
Note: if you’ve scored less than 6 out of 9 on the Problem section, go back and try and improve your score. Your Solution Bias and Confirmation Bias have hijacked your brain and your focus is in the wrong place if you’re working on your solution at this stage.
Solution Score / 0–2
Recommendation for focus
Provided you have found a problem worth solving that your audience cares about, focus next on creating and testing concepts with your target audience. Don’t get hung up on perfection. Think ‘quick-and-dirty concepts and low-fi prototypes.
It’s more important to get lots of ideas into your customers’ heads and hands and help them imagine using your product or service at this stage than have something polished. Avoid getting emotionally invested in a concept and aim for quantity over quality.
Solution Score / 3–4
Recommendation for focus
You are starting to get stronger signals that concepts are desirable. At this stage, you still want to compare and contrast a few concepts to build confidence that a certain solution is the most desirable.
You may want to consider bringing more of a concept to life so that it feels more ‘real’. Generally speaking, unless you are an expert coder, avoid coding if you can. Coding is usually the most expensive way to test an idea.
Solution Score / 5–6
Recommendation for focus
You are on to something, it’s clear that you’re addressing the right problem with the right kind of solution. The evidence that you’ve gathered shows that you have a killer feature that people find value in using. This is a sign you should be focusing on Viability if you haven’t already started.
Recap
Lack of Product-Market fit is the number one reason products and startups fail. To avoid falling victim to your own Solution Bias and Confirmation Bias, always start by making sure you are addressing the right problem for your target audience before solving that problem with the best solution.
Next up
The next question to tackle is Viability.
Like what you’ve read?
If you’ve enjoyed reading this, please let me know by giving me a clap or leaving a comment below, it really helps me know what resonates with people like you.
If you’d like to hear more from me about Innovation, Design, Agile and Lean Startup then please follow me on Medium to get occasional updates.
Thanks for reading.
