Start with a Customer, End with an Idea

Two guys are sitting around shooting the breeze. One of them turns to the other and says, "You know, we should build a better search engine based on number of links to a given page...". Fast forward a couple of years and these guys have gone from startup to internet behemoth.* Whenever someone hears this story, they lament to themselves "Why didn't I think of that? Links to measure page reputation. So simple!"

What most people forget is that they had no idea how to make money from it. They just had a great idea and ran with it.

That's how things remained for decades. Startups were a high-risk, high-reward game till lean came on the scene. The Lean Startup adds an element of validated learning to de-risk the process. The intent here is to validate that your idea is something that people are willing to pay for. Using minimum viable product (MVP) principles, you validate the assumptions behind your idea while spending minimal resources and time. Think of it as maximizing the learning/spending ratio.

From Customer Development to Product-Market Fit, the idea is the starting point. The idea reigns supreme.

Here's the idea-first process from a high-level perspective:

1. Have a great idea
2. Create a product based on the idea
3. Find someone who will pay for using your product (or do this before #2)
4. Repeat 2 & 3 with as many modifications as required (pivots)
5. Get rich

The problem here is that things can go wrong at any time in this process. Your idea could suck. Your product could suck. Your customers don't see enough value to pay you. When all these steps line up just right, you become successful. Else, you crash and burn. Not good odds.

Flipping the process is exactly what it sounds like: have the idea last, identify paying customers first.

1. Find Paying Customers
• Your objective is to find people who will pay for your solution when you try to sell it to them
• Find a type or group of customers who already pay for things that they get value from
• Small businesses would be a customer. They already buy insurance, anti-virus solutions, advertising space,etc
2. Become Your Customer
• Learn to think like your target customer. Immerse yourself in their world. See things from their point of view.
• You should be able to rate a product's attractiveness from their point of view. What are their trigger words? Would they rather pay a large upfront fee for unlimited use or a pay-as-you-go model?
3. Feel Their Pain
• Now that you are in their world, find their pain points.
• What bugs them?
• What prevents them from being better, bigger, faster?
• What part of their job do they hate the most?
4. Have an Idea & Pitch a Product
• Once the pain is know, pitch an idea or product designed to kill that pain. 
5. Sell the Product
• If the previous steps were executed properly, you should be able to sell the product very easily.

The key advantage of idea-last startups is this: As you progress through the steps, your odds of creating a profitable solution actually increases.

Also notice is how linear the process is when compared to idea-first startups. There are no iterations. In the latter, you  iterate and shape an idea till it fits a market. In this case, you identify a market and create an idea that you know they want. You identify paying customers. They're going to pay for *something* if they see value in it. We know that because they're already paying for things they're seeing value in. The best way to create value is to alleviate pain. So, we know that anything that eliminates or alleviates pain for your customer will be a solution they will pay for. QED.

So the next time you're thinking of starting something: Start with a customer,End with an idea.

* Don't tell anyone but the whole Stanford PhD story is pure SV spin :)