Every week, it looks like a new entrepreneur is changing the world in terms of banking and payments; each week, another failed start closes its doors.
It is so easy to spot gaps in your business model that you should ask yourself why these potential entrepreneurs look beyond their comfort zone.
It is very easy to drink your long cabbage, so you have to face reality.
1. What problem are you trying to solve?
Most entrepreneurs try to solve a problem. At one point, they had a revelation: not just a problem, but a solution and a business model for it. Everything is fine. Here are some questions for them, because they say they are trying to solve the problem.
• How did you come to the conclusion that this is a problem?
• Break the equation, have you explored the field and talked to other experts and/or normal people and confirmed statistically that this is a problem?
Unless you go out and talk to a large number of people (200? 500? 1000?), Your proposed problem remains difficult. Some problems cannot be solved today; some problems are not worth solving; while some are not problems. We will.
Action: Determine through surveys and/or focus groups that the problem is worth solving.
2. Solution Are you looking for a problem?
Sometimes, entrepreneurs are a little smart. They have a product or service that they think is great, so they turn to the market to make it happen. Tens of thousands of innovations have been defined worldwide. They are excellent products or services, but unfortunately, they will never make it to a good day. See Yanko Design for a similar example: a large percentage of what you see on your website will never reach the market, despite the seemingly strong belief that there is a market for it and that it is little, but many restrict it. 10,000 projects go to Yanko for mass production.
Just because you have a solution for something, it doesn’t mean that the problem is big enough to be solved. The size of the market must be an extremely important element to be considered. Always think on a larger scale.
Policy: In most cases, solving a problem is a warning sign. If you try to put your solution next to a problem, your business is likely to be weak.
3. What is the advantage of your solution?
When an entrepreneur tells me that his price or technique has an advantage, I immediately lose interest.
Price and technology are temporary benefits. If your business model is based on these two elements, you are unfortunately already lost, but you just do not know it. In extremely rare cases, these two elements provide an advantage.
The behavior is different when it comes to banking and payment transactions. If you can build a product that can disrupt behavior or speed, have an excellent experience, etc. Make an offer, you can have an advantage. One star/bank payment products usually look more expensive, not cheaper.
Action item: Can you keep it if a participant matches or leaves the prize? What will you do if the technical clones appear? Validate your solution with more than one price and/or technological advantage.
Despite the best resources and talents, it is the market that determines the fate of your project.
You can manage two aspects of your startup at the same time:
*You need the right ingredients (talent, team, money, domain knowledge, etc.) – this is something you can control.
* You need time (time for research, time for development, time for the market, etc.) – this is also something you can master.
* It must be the right time (the market is ready) – this is something you have no control over. Sometimes you can arrive too early or late, or you can arrive on time, but someone else takes over.
4. 5 Ps
Remember: 5P = advance planning avoids poor performance! Do not forget. Companies that spend money (and time) to thoroughly research their problems, disconnect them from the equation, and pay close attention to what the market is saying are likely to be more successful than those that are not.