How to Know What Customers Would Pay For
4 questions to ask yourself before building a product
Hobbyists create what they wish to see in the world. Successful entrepreneurs discover the needs and problems that customers are eager to pay to resolve.
Sure, being your own first customer makes things easier. You can "scratch your own itch" and find innovative solutions to your problems. But remember, the world doesn't revolve around you. Your "itch" might not be a viable business opportunity.
Nobody will pay for a nice-to-have
To clarify whether your product is a major pain killer or simply a nice-to-have, ask yourself the following questions:
1) How significant is the problem you're trying to solve? Successful businesses aren't built on minor annoyances. Your solution should address a critical and/or urgent pain point. After all, your greatest competitor is doing nothing.
2) Who is dealing with this problem? Is it a niche group or a broad market segment with potential for sizable returns? How much purchasing power do your product champions have? Ensure your target audience not only wants, but is also allowed to pay for your solution.
3) What alternatives exist? Are there competitors in the market, and how will your product compare? Are there established solutions who could add competing features in the short or mid term? Your product needs to provide a significant, long-lasting improvement.
4) How much would your customers save by using your product? Current economic conditions favor products that enhance productivity and efficiency. If your product can save customers time, money, or stress, they'll be more likely to invest in it.
A weak example: single-purpose AI tools
Right now there's a flurry of AI tool products that are essentially thin layers over ChatGPT or another AI language model. You've probably seen many ideas or MVPs that follow this pattern:
An AI tool that (takes some input) in (domain) and (provides some output).
But think about this: what if every company with a stronghold in (domain) is already building this? Or OpenAI itself? Whoops.
To avoid overcrowded spaces, build what isn't obvious
If you are interviewing prospects in search of problems to solve, keep in mind they might not be able to articulate what they'd pay for. Their pain points could be so ingrained and "normal" to them that they fail to identify them as such.
This is where your deep expertise and observation come in. By truly understanding your customers and their needs, you can unearth problems they may not even know they have—until they see your solution, that is.
The inception of Operately wasn't a result of random inspiration or systematic research—it came from over a decade of experience running software businesses. We've come to realize that disciplined and efficient processes are critical for successful execution. Yet, until now, most organizations have been piecing together makeshift solutions. So, even without direct competitors sharing our vision yet, we're confident that we're addressing a real, substantial problem.
In conclusion, understanding what customers want is just the start. Digging deeper to unearth overlooked but critical problems they'd willingly pay for—that's what sets successful products apart.