EP. 11: Why Every Founder Needs a Market Vision

We all start our businesses for different reasons. For some, it is a personal pain point–a problem that we want to solve for ourselves. For others, it is a person or group that we want to help. No matter how you start as a founder, it is crucial that you find the big why for your business–the reason your business exists.

In this episode of InDemand, Asia Orangio, founder of DemandMaven, dives into the different ways businesses start and the overarching importance of vision when it comes to growing your company.

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Transcript

What’s up founders! And welcome back to the In Demand podcast where we talk all about how to reach your first $1m ARR. I’m your host Asia Orangio and I’m the founder of DemandMaven where we work with early-stage SaaS companies on reaching their very first growth milestones.

All right. So today we’re going to be talking all about why every founder needs a market vision. Vision is one of those words that feels very fluffy and just in just intangible and almost every single way. It’s not the most concrete word, but when I say vision, I’m really talking about that. Focus on the problem and who you want to solve it for who you want to solve the problem for a vision for a founder. It could be something as simple as to create a marketplace, to connect friends and family in the world. That would be a Facebook vision. For example, another vision could be to make it as seamless and easy as possible to pay my employees and my contractors that could potentially be the vision for Gusto. Another example. I actually don’t know what either of those companies, vision statements are, but just to give you two examples of what I mean, what’s interesting.

However, is that a vision statement doesn’t necessarily tell you what to build and that’s kind of the beauty of a vision statement is it really just says, okay, well, who are you serving? And what is the w what is he the benefit that you’re providing or the pain that you’re solving for people? And in Facebook’s case, it’s being able to connect with anyone anywhere, and even more specifically your friends and your family from anywhere in the world. For Gusto, it could be as simple as making it easy to pay your employees and contractors as hassle-free as possible. How you do that is, is, is really up to the business. The reason why I feel so strongly about this topic and the reason why I write about it so much, I speak on it so much. I mention it in just about every single presentation or conversation that I have, if I can is because of how critical it is and how it actually lays the foundation for you to go and build your business.

There are really two ways to build a business that I have identified. And I’m sure there’s more, but from what I’ve seen, at least in the SAAS industry, there’s really two ways to go about it. The first way is to build the product. First based on some pain that you experience, this is very common. So you, as a founder might experience a very specific kind of pain. You see it in your industry and you want to fix it for yourself. And so you typically build software for it. And the next step after that is after building the, then the question becomes, okay, who else needs this product? That’s one way to build a business. The second way to build a business is it’s not, I, I’m not going to say if it’s more or less common, I honestly don’t know if it’s less common in my experience, it’s less common, but the second way is to actually enter the market with a clear vision and figure out what to build later.

And this to me is a very critical differentiator in the longevity of a business, and also potentially the success rate of a business. I can tell you that from a go-to-market perspective, it is much easier to go to market with the latter strategy. It’s much harder to figure out where to plug and play a particular platform. So let’s say you build a product and you know that it can solve a problem for people like you, but you don’t really know where else it can go. Usually, that’s a much more challenging journey, and we’re going to talk all about why and how you can really arrive at your own very specific vision. If you don’t already have one now building a product first and, you know, nine times out of 10, like you, you already have an idea at least of what you need it to do.

We already know what problem you needed to solve when it comes to turning that into an application that generates money. However, you have to cross a few hurdles. And the first hurdle is really well. What is the overall vision for the product and for who, what part of the market? This is our tour. This is where we start to really define who the audience is, but really what is the number one pain that we hope to solve and for who? And when we first build a product, usually it’s just for us. But sometimes from a founder perspective, at least if we enter a market and we analyze a market and we identify what the potential pains are. And we also start to identify who will, who experiences these pains? And is it strong enough to pay for them? That’s when we can actually define a product or even a service, but we can really start to define what a business could be.

And I find when you approach it in that way, a couple of things happen. The first is you really start to understand what kinds of problems are out there in a particular market. And the second thing is if it’s going to be profitable sometimes and, and I say, sometimes I know that these are not like hard concrete numbers, but I find a very common experience for founders. Who’s already built a product and they don’t know where to plug it. Usually, the pain is something that they might have directly experienced, but in order to make it applicable to a particular market or a particular audience, they have to go through the process of product market fit. And that’s something that every company has to go through. What is especially true for businesses that don’t necessarily enter a market with a clear vision, but they have a product that solves a very specific pain for themselves or someone they know, and they want to figure out what are all the other applications of this.

It’s a very long process going about it that way, but just purely because the possibilities are endless for one, but also too, you almost kind of have to rein in what those possibilities could be. It’s very easy to take something that you’ve built for yourself and apply it to just about any market, depending on what the pain is. But I think the tough part is you’ve got to figure out, well, what is the audience? What is the market that you’re ultimately hoping to serve and why, what, what do you want to help them with? Is it to make it easier for them to be able to pay their employees? And contractors is it to provide a space for minority-owned businesses, to connect with enterprise contracts, creating a marketplace in that way, there are just infinite gains that you could be solving.

And if you’re able to hone in on a specific pain, the next question really becomes well for what part of the market, for who, for what market. And that’s when we create the big list of all the different potential markets that we could put the product in front of. And you could go down the list, you could prioritize that list. Maybe we’re targeting moms, maybe we’re targeting businesses, maybe we’re targeting businesses with 50 employees or higher from there you start strategizing about, okay, well, who’s going to be the best person to buy this, or who’s going to be the person who was able to solve the pain. And then you find, you have to build sales processes and marketing campaigns for every single one of those different audiences over time. And sure you might strike gold. You might find a particular market or audience who really loves your product and who could really solve some pain with it.

But if you don’t find the right audience, if you don’t find the right market, you might actually end up wasting a lot of time and burning resources and energy and the entire process of going through building something. And then on top of that, trying to figure out, okay, well, where does this fit in the world? It ends up being a very, I don’t want to say soul sucking process but it can be frustrating. It feels like everything that you’re doing, isn’t working, it’s inefficient and you end up spending a lot of time here. Sometimes you get really lucky and you find out that someone somewhere is able to actually really use your product or service in a way that is, is very beneficial and powerful and revenue-generating. And on the contrary, on the flip side, it could take a very long time.

I don’t know if this is the most common way to be honest. I think in my experience nine times out of 10, I’m definitely talking to a founder who was in that latter situation where they might’ve experienced a pain, they built something just for themselves, but then they wanted to figure out if it could be applied in many other markets not to be discouraging. That’s not the goal of this. It’s much more to help really focus and align on a specific vision for the market. But what I typically recommend to founders who are kind of in that bucket, and they don’t really know where to paddle or even where to go in, you know, the ocean of possibilities that they’re in. There are really two things that I recommend the first is really take a step back and think about the ultimate pain that you’re solving.

Did you build what you built to save yourself some time? Did you build it to save money? Did you build it because something was frustrating you and there was a very specific thing about that frustration that just deeply resonated with you that, you know, caused you to build this or motivated you to build something. And then when you take a step back and you think about knowing what the pain is, and also knowing who you are, think about what other products or experiences are similar to your own. And that’s usually enough to get you thinking about not only competitors or competitive products, but also think about maybe companies and brands and products that you really like, and that you really admire. And when you really think about your interests and where you would like to market-wise enter and also be thinking about what kind of business do you want to build that usually stresses out a little bit more of a vision statement or a little bit more of what is your vision, not just as a founder, but as an entrepreneur, I can speak for DemandMaven, for example.

So, for DemandMaven, it’s not necessarily just about offering growth services or whatever to SAAS companies. Actually, the reason why I built my business, my number one motivating factor was I personally think that it’s, it’s too difficult to be an early-stage founder. These days you’re inundated with information and at the same exact time, you’re not inundated with resources. And I think that that’s unfair. That’s what motivates me. It doesn’t really matter what I do. So demand even could be a course. It could be a service. I mean, I technically am a services company now, but it could be like a full-service agency, but my focus has always been on the plight of the early-stage founder. That’s always what motivated me. What’s motivating you is, is my first question. The second piece of feedback has actually much more to do with how you build your business.

So it’s okay if you have entered a market and you have no vision, or maybe your pain at least is very clear, but you have no idea where to go from a go-to-market perspective or who else is experiencing this. You’ve no idea how to figure that out. I actually think that the second thing is something that you could do to mitigate the risk of either efficient or wasting too much time or wasting too many resources. And that’s implementing a growth strategy that will enable you to learn as much as possible. I probably need to record a whole separate episode about this, but it’s actually possible to build a product and to launch it and to go to market with it without taking on a ton of extra funding or resources, and to figure out if what you’ve got is something that has legs.

And also, specifically on a particular part of the market. I’m not saying that you can do this with zero funding or any resources at all unless you plan on just doing everything by yourself, which is absolute, legit impossible, but if you wanted to experiment as much as possible, and if you wanted to learn and you wanted to implement a strategy that enabled you to learn, but also remain data-driven, then I would actually recommend focusing on the different parts of the market that you think could get the most value out of what you have to offer, but also doubling down on customer research, customer discovery, and really understanding in the ballpark area of what your, of, what, of the pain that you’re ultimately solving. And then also for who the other part to that is really, you can actually implement a go-to market strategy that again, helps you learn as much as possible.

And typically, that looks like having a freemium model of some kind of way, and really working hard mentally, personally, emotionally to figure out where do you actually want to be? And what kind of business do you actually want to build on top of that, implementing a data-driven strategy. So, or at least a data-driven function of your business. So that way, as you start to see some inclinations of product-market fit, for example, you know exactly where that’s happening, who it’s happening for, and what to actually do later, if you have a really strong product-market fit for a very specific kind of segment, you would, you would know it one and two, you would know exactly what you would need to do later. Before I, before I leave off from the very first point, one of the most popular examples of a business entering a market, maybe without a clear vision, but they, they were experiencing a pain and they wanted to know if anyone else was experiencing this pain is actually Airbnb.

And Airbnb is one of those companies that gets thrown around a lot when it comes to not only how much VC funding they’ve been able to raise, but also just from a, we want to be like Airbnb, or we want to be like this company, especially in a marketplace perspective, I feel like marketplaces are one of the most profitable SAAS models out there today. And it seems like everyone wants to do some kind of marketplace. And Airbnb is a name that gets thrown around a lot. But the part of the story that many people don’t know is that it took Airbnb like six or seven years to get to where they are today, which probably seems wild, but it’s the truth. And you can go and you can learn about their story. You can listen to all the podcasts and articles about them, but it was as simple as the two co-founders or maybe it’s three. I can’t remember. But the two co-founders were experiencing the same problem of wanting to get a little bit of extra revenue based on their extra bedroom or couch or whatever. And if not mistaken, they actually they experienced the pain themselves, where they want it to just be able to go and stay at someone else’s place whenever they were traveling and they experienced it so often that they decided to actually open up their room for it. And so they, they built air, bed, and breakfast and they rented, they rented their couch. And over time they started to get people actually booking their couch, but they started to realize that, Oh man, like this is actually something that, you know, maybe other people are experiencing the same exact pain. And then they thought about themselves and their use case and the pain that they were trying to solve and immediately realized that they had a huge total addressable market.

I’ve talked about TAM before on the podcast, but their total addressable market, if you think about it is it’s easily in the billions. I mean, it’s anyone who travels, who wants to feel like a local, but it took them, I think, two to three years to achieve a certain sense of market timing. And of course, product-market fit. It was hard for them to find investor money and the, in the early days and it was also hard for them to figure out what exactly needed to happen that would encourage people to book and also encourage hosts to open up their properties. And it took, it took a long time. It took, you know, two to three years. But when it actually happened,, it took off like lightning. And of course, like that’s how you, once one of the ways that you know, that you have a product-market fit because it’s almost like you’re guiding the Boulder down the mountain.

You’re not, you’re just making sure it doesn’t fall off. You’re not like pushing it up the mountain anymore, but for a long time, they were pushing the boulder up the mountain. They were trying to overcome challenges in the marketplace where people didn’t quite get it or there was still some hesitation around either being a host or being a guest. And once they implemented a lot of the right things to overcome those fears, really all they had to do after that was focus on the acquisition piece and think about the acquisition for marketplaces. It’s a, it’s all about supply and it’s all about demand. And typically nine times out of 10, you build the supply. This, you build the supply first. The demand comes later and as they built and focused on making their product even better and even better, they realized that once they overcome some of the hurdles of getting the supply together, meaning the hosts, then all they have to really do is just provide an amazing booking experience for guests.

And once those things aligned, it grew, and it grew and grew and grew. And it’s the company that we know today, but that took five to six years. It’s a very long process. And it’s something that they’re still learning, especially with the pandemic and especially with travel being something that is not so encouraged right now for Airbnb. It’s how long it took them. Now it could have been different potentially it could have been different if they had entered the market saw that the hotel space and just the travel industry, in general, was lacking something. And that the aha moment was really that they just realized that all these people have all these different rentals and properties that they could actually be making money off of. So there’s the, there are the host and supply-side right there. And then of course there are people who, when they travel, they want to feel like they’re local.

And if they had entered the market with that specific vision, who knows if they would have been nearly as successful because of the timing, but if they had entered the market with a very clear vision of, we want to build this, this is what we think we need to have an implement. And this is how we can test the overall market and test what we’re seeing. It’s very likely that they could have achieved their success in a little bit less time. I think the ultimate clincher, however, was they had a hard time finding an investor in the beginning because most investors didn’t think that people would want to stay in a stranger’s house. But little did they know little? Did they know but if they had access to capital or resources or if they had the access to, to, to do those things, they actually might’ve found success or growth, at least even faster.

It’s very possible. So that’s an example. And before I gave that example, I was about to go into what it looks like to enter the market with a clear vision. And I admit that this is rare. It’s so rare. And I, I would definitely argue that it’s a better way to go about it. I think in the end, Airbnb was lucky. That’s probably something that they might agree with. They hit the market at a time where staying in a stranger’s home and paying for it, wouldn’t have been weird. People were already doing Uber and Lyft by this time. And I actually think that they credit a lot of the hard work of writing in a stranger’s car actually to, to their own success. Because once Uber and Lyft got over that hurdle it actually in many ways, mentally paved the way for something like an Airbnb, where it’s no longer weird to be in a stranger’s home or in a stranger’s car, but entering the market with a clear vision.

That is something that I strongly encourage founders to if they can, because when you enter a market with a clear vision, again, you understand the pain that you’re trying to solve. And you’re pretty clear and focused on for who, when those two things happen, whether you have a product or not, usually that means that you can start to define what is the right product to build. And this is actually where I very much believe that the market really comes first. The customer really comes first and the product comes right after that. Sometimes you can build a product first and never find the right kind of customer for it. It’s very likely, I actually do fundamentally believe that it’s far less risky to go the opposite way to really focus on a very specific market first. Even if it is a TAM of a billion dollars, maybe you are focused on the world, but at the end of the day, if you’re very honed in on who you’re trying to serve, why then the, what is, is really a byproduct of that.

And it’s, it’s what, it’s, what kind of spits out after you really figure out, okay, well, who do I want to actually help at the end of the day? And how am I solving that for them? Like how, like, what is the ultimate pain that I’m solving for them? And then you get into the, okay, well, how is the best way to solve that? Is that a product? What I like about this approach is that you might not necessarily have to build a SAASs product to build a great business. And I think that’s a very common misconception, especially among early entrepreneurs who are just starting on their SAAS journey, is that the w is that they believe that they have to start a SAAS. One of my favorite growth examples was actually a company that I had the pleasure of working with. They were very focused on the therapy and telehealth space, meaning, you know, how you can do like therapy online now.

Well, this particular company was really focused on the actual therapist part of that. So their patients need to be able to connect with clinical supervisors and other people and become licensed. It’s actually really hard to become a licensed therapist, which who knew, but what I loved about their business model is they knew exactly what market they wanted to focus on. They knew also exactly who they wanted to serve. They wanted to serve these pre-licensed therapists. They didn’t quite know what to build, but they knew exactly at least the pain that they wanted to fix. What they learned later was that this would actually become very profitable. And also what they would learn later is that they could actually productize this. They started out with service and there are actually many examples of very successful companies who started out building a service. First, they created the service model first where you know, all that really matters is making the revenue.

But if you can offer a service well, that’s, you know, in theory, a pretty low-cost point of entry, they productized it later. Bench I think is another great example of this. Although belief the product technically came first and the service came later, it could actually be vice versa demand curve, a bell curve. They started out with a service and over time they productized their knowledge into a course. There are all kinds of examples of this. I actually think that entering into entering a market with a very clear vision and then figuring out what to build later is a slightly better approach. I want to say slightly because I don’t have any actual data on this, but from what I have seen, it just dramatically improves not only your chances of survival but also how you go to market because when the pain and the person and the vision are clear, everyone can work to support that vision.

When the vision is not clear, everything gets questioned, everything also needs to be defined at the same exact time it’s simultaneous. And that can create a lot of confusion. It can create a lot of chaos. It can also just create a lot of doubt in terms of what exactly you’re building and why you’re building it. So if you are in that camp of, well, I don’t really have a vision. I don’t really know what we’re ultimately trying to do for people or why. I definitely take a moment just to, in many moments, probably this probably isn’t something that just happens in 10 minutes, but I highly strongly encourage you to take time to think about it and to really dissect and unpack the purpose of the business that you’re building and the why. And I think you’ll find that the, what the, how you accomplish that if it’s close to what you’ve built, awesome.

And if it’s not close, then at least, you know, to turn your ship in that direction. On the other side, if you have a clear market vision, if you know exactly what you want to do, and maybe you’re even, you know, 80% of the way there on having the actual product or service or whatever it is, do not be afraid to hold onto that focus. And don’t let the market deter you until you’ve actually entered it. And you’ve actually tried. There are many examples too, of founders who have entered into a market with a very specific vision, a very specific goal, a very specific segment only to find out that their monetization strategy wasn’t as effective as I thought it would be that they built the right product. They built the right thing, but it wasn’t profitable. So now they pivot and that is still that’s still a faster path to profitability and to revenue generation.

Then, of course, I’m guessing the entire time. But even that path I would say is still better because usually, you can find that you expand the market or you take the problem that you’re solving and you apply it elsewhere. But overall though, if you have a clear vision and it’s really just about the, what, like, so what do you build? How does this actually get executed in the real world? That’s where you actually have a lot more freedom than you think that you do focus and vision will set you free when it comes to running your business and building a business. And I highly encourage every founder to strive for that, if they can. And if you do have a strong vision, if you have a clear vision, you know exactly where you’re focused, where you’re trying to go, make sure your entire team knows it, and make sure that everyone is on the same page about what that vision is. That’s going to help you create an amazing product, and that’s going to help you build an amazing business.

As always thank you so much for spending this time with me to learn more about how to reach your growth goals for your SAAS business, head on over to demand maven.io. You’ll find all kinds of free resources, articles, and content. Don’t forget to subscribe if you haven’t already and I’ll see you at the next one. Let me know what you think. I am always available on Twitter, @AsiaMatos. Thank you so much again and have an awesome day.

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