The document discusses five criteria ("5U's") that are good indicators of success for a startup business idea. The five criteria are whether the customer problem is: Untenable, Unavoidable, Unsolvable, Urgent, and Underserved. Startups should focus on solving customer pains rather than jobs or gains. Evaluating a business idea against these 5U criteria can help determine its potential, though low scores don't guarantee failure. The criteria don't provide a comprehensive evaluation on their own.
2. The Ideal Product
What is an ideal product (or service)?
One with a maximal chance of success
Can we predict success for a business idea?
No
But...
We can name five criteria that are a good indicator.
3. Three Kinds of Customer Need
Jobs to be Done
Everyday tasks that the customer must carry out
Gains
Things the customer would like, but does not need
Pains
Problems that the customer has
4. Three Kinds of Need: Examples
Jobs to be Done
Accounting, cleaning, maintenance
Gains
Office parties, entertainment, luxury goods
Pains
Illness, lawsuits, sinking profits
5. Startups Should Solve Problems
Which category is best for a startup idea?
Reducing pain
Why?
Less competition
Easier to get customer attention
Easier to get a purchase decision
Easier to charge a premium price
6. The Five 'U's
Five attributes of the ideal customer problem:
Untenable
Unavoidable
Unsolvable
Urgent
Underserved
7. Untenable
What does it mean?
Customers cannot afford to ignore the problem.
Consequence:
The customer must obtain a solution.
Examples:
Weak eyesight, declining sales in a core product
8. Unavoidable
What does it mean?
The customer cannot sidestep the problem.
Consequence:
The customer is forced to seek a solution.
Example:
Contractual requirements
9. Unsolvable
What does it mean?
Customers cannot solve the problem themselves.
Consequence:
The customer must seek a third-party solution.
Examples:
Lack of expertise, lack of a resource
10. Urgent
What does it mean?
The customer needs a solution fast.
Consequence:
The customer is motivated to act quickly.
Examples:
Migraine, sudden drop in sales
11. Underserved
What does it mean?
No (adequate) solution is available on the market.
Consequence:
The first solution to appear will have a monopoly.
Examples:
Cure for cancer, nuclear fusion energy generation
12. Evaluating the Idea
Problems seldom have all five attributes.
Therefore, treat each criterion as gradual.
For example using a scale from 1 to 10
Determine your condition for attractiveness.
Example: Idea scores at least 6 in all dimensions.
14. Low Scores
Does a low '5U' score imply future failure?
No! (Facebook and Twitter would have scored low.)
It does mean that success may require…
deep pockets
extensive marketing
difficulty finding product/market fit and a USP
luck
15. Low Scores
Each low score indicates a potential difficulty:
Not Underserved: Strong third-party competition
Not Urgent: Hard to gain attention and interest.
Not Untenable: Doing nothing is your competitor.
Not Unsolvable: Your customer is your competitor.
Not Unavoidable: Avoidance is your competitor.
16. Examples
Penicillin:
Fulfilled all five criteria when introduced in the 1940s.
A divorce lawyer:
Scores low in Underserved, otherwise highly.
A data recovery service for failed disk drives:
Scores highly for Urgent, Unsolvable and Untenable.
17. A Common Error
The most common cause of startup failure:
Building a product that nobody wants
The same is true for inventors
Many patents are "solutions without problems".
For example the dust cover for dogs.
USPTO: Only 0.2% of patents have commercial value.
18. Caveat
The '5U' do not provide a comprehensive check.
There are other important criteria!
For example: Market size, defensibility
However, a high score in the '5U'…
does suggest a very valuable business idea.
19. Impulse für Innovation
Der deutschsprachige Blog für Ideen und Innovation
www.zephram.de/blog/
Ideenfindung
Weitere Themen in unserem Blog:
Ideenbewertung
Geschäftsmodellinnovation
Produktinnovation
Innovationsworkshops