The ideas that go the distance are born of an understanding of customers' triggers for making a purchase and barriers to buying
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On a rainy day in New York City, Travis Kalanick and Garrett Camp couldn’t get a cab. They quickly realized that trying to get a taxi in the rain was a horrible experience. The duo went on to found Uber, which became one of the most successful unicorns in history. If you haven’t heard the term ‘unicorn’ before, it applies to private companies worth more than $1 billion. If you’ve got an idea for a business or a product, this could be you. Or you could be like the founders of Napster or Pets.com—famous failures that came close, but no cigar. The thing is, there isn’t much of a difference at the ‘idea stage’ between huge successes and ignominious failures. I like to think that each of you has an idea that, if targeted effectively and nurtured properly, could grow into being the next Facebook or Alibaba. But you have to realize that your current idea for a business is very unlikely to be the idea that you end up going with. And it’s even more unlikely that your current idea will result in a company worth billions. What you actually have is the foundation of an idea, something that can point you in a particular direction. If you listen very closely to what potential customers are saying, they will tell you what business you are in. In life as in business, the difference between listening and not listening is the difference between success and failure.The thing about customers is that they don’t talk very loudly. In fact, sometimes they don’t talk at all. They won’t tell you what they want or what you should create, or what triggers them to make a purchase. They also won’t tell you what barriers get in the way of them making a particular purchase. They might not even know that what you have is something they need. This is why we can’t listen passively to customers. We need to engage with them and ask them the right questions. The big issues are, what questions to ask, and how to interpret the answers. You can’t ask your mother whether something is a good idea, because chances are that she loves everything you do. And you can’t go out asking friends and work colleagues if they like your product or company idea; chances are that most people will say Yes because they don’t want to hurt your feelings. What you need is a framework to help you listen to customers, to understand what triggers them, what barriers stop them, and how they view your company and the competition. You need a framework to help you understand how they think, what they feel, and how your idea relates to their lives. But before we get to that, let’s look at what goes wrong when you don’t listen closely. I don’t mean to be negative, but it’s important to see what you can avoid if you listen closely. Think of the following as cautionary tales. The Reason for Daunting Failure Rates[This article has been reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management]