Talented Entrepreneurs Working on the Wrong Idea

Last week, I had a great conversation with a fellow entrepreneur. We debated various challenges in our industry. Eventually, our discussion centered on an issue I find particularly daunting: talented entrepreneurs working on the wrong ideas.

Over the years, I’ve met hundreds of entrepreneurs. While I don’t have an answer on what guarantees success, I’ve seen certain indicators related to customer adoption, market readiness, and business model. When I engage with an entrepreneur whose business doesn’t exhibit these indicators, I often suspect their venture is misaligned with the market.

It’s so hard when a clearly gifted entrepreneur possesses drive, passion, grit, resourcefulness, and tenacity, yet their venture is unlikely to succeed without significant changes. How can we help them realize that their current path might not yield the desired results?

Many tools help in entrepreneurial development, such as the simple one-page strategic plan and the business model canvas. These resources help structure a business and the quest for product-market fit, and beyond. However, if the market isn’t receptive, or there isn’t enough demand or opportunity, success remains elusive.

I often evaluate ventures based on two criteria:

• Mission Criticality: How essential is the product to a client’s operations?
  For instance, during the great recession, a fitness center faced a dilemma: pay the electricity bill or their SaaS subscription. They prioritized the latter, underscoring the software’s importance to their business.
• Path of Revenue: Does the product directly impact the client’s profitability?
  The best examples are products that offer clear, patently obvious return on investment (ROI). If a customer purchases and implements a product that boosts their profitability or has hard savings, the product’s value becomes self-evident.

For entrepreneurs focused on an unworkable idea, my advice is to challenge their assumptions. Encourage them to visualize a venture with stronger market traction. Instead of feeling like they’re pushing a boulder uphill, they should feel like they’re guiding a snowball downhill, gaining momentum. When things click, the experience changes dramatically. It becomes exhilarating. Those who haven’t felt it won’t appreciate the difference, but it’s profound.

One question for entrepreneurs to ask prospects and customers: does this solution solve your most pressing issue? They might see this as a nice-to-have while a must-have is on the tip of their tongue. Prospects and customers are always the best source of ideas. 

There’s a paradox, however. Entrepreneurs with abundant grit and resilience might persist with an ill-fated venture. To assist, it’s crucial to broaden their perspective. Encourage them to consider adjacent markets or variations in their idea. The better market might be right around the corner.

Many talented entrepreneurs work on startups that will never succeed, no matter the circumstances. If we can guide them toward more opportunity-oriented thinking and encourage ways to find even better needs in the market, everyone will benefit. Entrepreneurship isn’t a zero sum game and we need to move the world forward, faster.