A successful business is built on knowing, not assuming

We have listened to many aspiring and actual entrepreneurs pitching their business cases to attract investor interest or access business development support. They often have a strong belief that their product or service concept is the best thing since sliced bread and feel that they know who is going to buy it and for what – but often such a feeling is merely assumed. They are making assumptions without really knowing.

What’s an example?

One aspiring entrepreneur presented a business concept which he was going to position in a part of the market with which he had a close connection and empathy. The chosen market area was not particularly commercial and required considerable funding support to be viable. However, the multi-purpose online platform he developed had some unique inbuilt functions that could have been of interest to a broader range of end-clients than he had ever considered - many in commercial market sectors. Because he conceived and developed his concept within this particular niche, he had overlooked much larger opportunity spaces in the market that were potentially much more viable.

What’s another?

Another young entrepreneur made a confident pitch to a panel in the hope of receiving business development support. His product had been patented. Those who patent things often think that it is a license to print money. However, less than 3% of all registered patents actually generate any revenue. The other 97% are merely ‘good ideas’. He and his business partner had assumed a lot of uses for their patented device in the marketplace. However, they had done little research to check whether clients would actually want to use their device for the purposes they had identified. Many of the spaces they identified were already being serviced by well-established solutions. They failed to ask clients about the challenges they faced and then whether their device offered a unique competitive solution. They assumed rather than knew.

What’s a third?

A team of three young entrepreneurs made an impressive pitch for a smart, cost-efficient, ICT-based solution they developed that would help businesses and agencies deal with vast amounts of paper-based records and documents. The team understood clearly what the potential threats to their market space were and explained what they had put in place to address those threats. Their offer was one that could potentially be sold to any client in any sector in any country. To prove how great their solution was, they completed a project at an agency where alternative solutions provided by several large international deliverers had failed to deliver – mainly because they didn’t have the right systems and quality control procedures in place. By proving the worth of their solution package in a real-life situation with a real-life client, it gave them a solid basis for pursuing opportunities with other clients. They moved from assuming to knowing.

What does this mean for businesses?

The biggest threat to any business, whether new or established, is failing to learn what a customer or client might want. Often a great deal of effort is put into developing a unique product or service without having established whether it is going to fulfill a customer/client want or need. Markets are driven by wants and needs. Success results from knowing, rather than assuming, what customers may want and/or need.