Or how do I know I'm building a painkiller and not a vitamin
This article was born from my frustration with the "vitamin vs painkiller" metaphor, which is a prime example of perfect hindsight, non-actionable startup advice. As in: no founder sets out on the startup journey intending to build a vitamin; yet, it can be very difficult to come up with actionable "tests" of what's what. I try to list here a few very concrete tests that have helped me create more certainty.
It will likely be most helpful for B2B founders currently navigating product-market fit (PMF) and early sales.
The last product standing
This could also be called: how well do you really know your buyer?
The tech industry goes through cycles of booms and busts. Some are dramatic like the dotcom bubble, while others are barely perceptible by outsiders like the 2022 post-Covid contraction. Usually, a boom is fueled by a technological innovation coupled with friendly monetary policy; everyone looks very smart and all sorts of product ideas find buyers. The freshly printed money needs to go somewhere, and it flows down the hill of ideas, from ideas that are inherently great businesses, to the plains of terrible ideas.
Now, why the gratuitous metaphor? Because, there is a very real vertical stack rank of products: the Excel spreadsheet that your buyer (e.g. a CTO) puts together, during a bust, when they are asked to "cut 30% of our external tools budget". Which leads me to the first filter:
Always know where your product stacks up in the "budget reduction spreadsheet" and why, and aim to be the last product to get cut (or at least be in the top 30%)
Taking the example of a CTO buyer, here are some examples of products that get cut last:
- infrastructure that needs to be up for their own product to even work (database, network)
- communication (email, video conferencing)
- systems of records (ticketing, code versioning)
If, from first principle thinking or by talking to your ICP, you can't confidently imagine your product in that top 30%, you should assume your product is a vitamin.
Involuntary sale (the good kind)
When talking to potential users and buyers, there are really 2 signals that matter:
- Someone absolutely hates your product idea and passionately explains why
- Someone is literally begging you to take their money and they are not your mom
Almost all the other signals are noisy and thus will create more uncertainty, which is the last thing you want as a founder. A few examples of such signals are: finding your product "super promising", an ICP wanting to invest in your company but not buying the product itself, giving you advice, saying their friend would love this product, etc.
The first signal is useful because it means you are doing something either truly contrarian (which could lead to a breakthrough) or really stupid. But in any case, you will learn what is wrong with your product idea or you will at least learn that the person in question is not your buyer / user.
The second signal means you have found at least one person in the world with a problem that is painful enough that they will give money to a tiny startup with an unproven product. These users will literally buy the product on the spot (e.g. completing a Stripe link you send them) and will have very little price sensitivity. You can find more people like them and grow from there. To sum up:
Find at least 1 person begging you to take their money
I need it, but I don't want it
There is a subtle trap when identifying product ideas worth working on: seeing real problems that few people actually want to solve. For example, imagine selling security tools for a new technology at the very beginning of that technology's lifecycle, or compliance tools before SOC2/GDPR/etc. existed. It's very easy to come up with this type of ideas because they seem so obvious ("the world should totally be like this and not like that!") and there is usually a lot of evidence pointing to the problem. Founders most at risk of having these ideas are the ones going into a market they don't know (lack of founder-market fit), or founders who follow the very top-down, "business school" approach to identifying markets and ideas. Just because you found a square hole, it does not mean users will want your square block.
Here are a few sniff-tests you can use to detect the trap:
- Your product is an antidote to another widespread behavior
- Success relies on educating the user / educating the market
- The users that seem like perfect targets are the first to churn
- There is no unavoidable, "compelling event" in the life of your user where they have to buy your product
Find users who have a problem, already know that they have the problem and want to solve the problem right now
I'd add that this one really shows why the vitamin/painkiller metaphor is a false dichotomy, because it can affect both painkillers and vitamins. The YC motto "Make Something People Want" perfectly captures the message.
10x better
This one is classic startup advice you can read online: "founders, your product should be 10x better than the competition", or something along those lines. Not the most actionable advice. I have personally struggled a lot with what that meant in practice, and the way I've rewritten it in my head is:
10x better at something for someone.
Let me break it down, but in order of importance:
- Why "at something": in order to win, you need to be 10x better at something very specific, very differentiated. For example, you might offer an existing product at 1/10th of the price, or 10x faster. It's impractical to be better at everything, since you have limited resources, and it makes you compete with incumbents. Taking the time to write down specifically what you are better at will spare you from a lot of uncertainty and painful learnings later. In particular, don't pick a product idea that implies rebuilding all the table-stakes in that particular market just to add your special new feature.
- Why 10x and not 2x or 5x: I've sold software and I've bought software, and 10x is what puts your product in the "immeasurable" category where buyers just pay for it without too many questions. Below that level, your product will follow the typical procurement process, approvals, studies of impact, etc. - precisely because it's too tempting to measure against existing solutions. 10x avoids competition, and competition is bad.
- Why "for someone": this one is connected to the learning that companies don't buy software, people do. The "10x better" experienced by the company (the buying entity) should have a corresponding "10x better chance of getting promoted" or "10x more time to spend with my kids" in the mind of your user.
Conclusion
I've shared 4 tests that can help answer the question "am I building a vitamin or painkiller?" in hopefully concrete, actionable ways. On the surface, especially if you are currently trying to find PMF, they may seem blunt or unattainable. Their shared goal is to create more certainty, the one thing startup founders lack most. Thanks for reading!