Internet Startups: 3 Pain
There’s no happy without sad, no good without evil – You need pain as a catalyst to overcome reluctance to change. A pain can be an inconvenience, added cost, missed opportunity, obsolescence etc.
Mathematically, Pain to resolve > Cost of resolving <=> Adoption
You can’t really understand customers’ pain till you really understand your customer.
Making an opaque part of an industry transparent and cost-effective usually solves a pain.
Some questions to consider:
- Does the industry have a supply / demand imbalance? (Groupon / Echo)
- Is there significant price elasticity?
- Is there fragmentation in the market?
- Are there too many steps in the process?
- Is there little automation in the process? Time consuming, tedious, error-prone.
- Is the customer over-paying for something?
- Is the customer not making as much profit as she can?
- Is the pain significant enough for the customer to pay for it?
- Is the customer solving the pain through some home-grown solutions?
- Is the market big enough?
More questions to discover articulated customer needs:
Note: Replicating a US business (and its business model) in other countries is getting easier because markets, customers, and their pains are very alike everywhere.
Based on the American Customer Satisfaction Index, some industries have been historically bad in customers’ eyes (Their scores in parenthesis):
- Newspapers (65)
- Subscription TV (66). Major offenders – Charter, Comcast, Time Warner
- Airlines (66). Major offenders – United, Northwest, US Airways, Delta
- Gas Stations (70)
- Social Media (70). Major offenders – MySpace, Facebook
- USPS (71)
- Wireless Telephone (72). Major offenders – AT&T, Sprint
- Hospitals (73)
- Health Insurance (73). Major offenders – United Health, Aetna, WellPoint
- Internet News (74). Major offenders – CNN, MSNBC