Many startup founders sprinkle a healthy dose of technology buzzwords to make their pitch seem better. I have talked to many investors to date and most do not like buzzword stuffing in presentations. These days buzzwords like AI/ML, Blockchain, Crypto, Cloud are used quite liberally by founders to make their startup seem on the cutting edge.
What many startup founders do not know and what most experienced investors know is that people pay for utility and not technology. Technology is worth only the utility it provides to the user or the customer. Thus a startup founder should try to focus on the utility provided to the customer instead of focusing on the latest technology.
If a new technology provides more utility then do use that technology but do not stuff the latest technology in the solution to make it seem cutting edge even though the user may not feel delighted due to that. Any good product needs to be desirable, viable and feasible. Do not just focus on technology. Technology alone is just about technical feasibility. The more important goal is to make users feel good about using the product.
A good example of this is Zoom. Zoom became hit in 2020 due to its simplicity and ease of use. Zoom has deep-pocketed rivals who are world-renowned for technology like Google, Microsoft and Facebook. Still, most people prefer Zoom over them because of the good user experience (UX). The reason is users find Zoom and its features more desirable.
Any good product needs to be viable for the organization providing it and also affordable for its customers. If the product is technically feasible but un-affordable by the customers then obviously customers would not flock to buy it. Also even if customers find the price point attractive but the solution is expensive for the startup to provide and the startup continuously bleeds money in providing that solution than one day definitely the startup will fold up.
This should be differentiated from situations which demand economies of scale for achieving profitability. There are many markets and products which need a certain scale to become profitable. Thus a startup will initially lose money in providing that solution but once it achieves the critical mass it will start earning profits. Thus when I am talking about viability I am talking about long-term viability.
The supersonic plane Concorde was a good example of a product that was desirable and technically feasible but unviable from start. In the end, Concorde had to stop flying due to various reasons, lack of commercial viability being one of the chief reasons.Technology obviously plays a central role in any innovation but the startup founder should remember that desirability and viability are equally important. The success of startups like Facebook, Zoom, Tesla, etc has been there due to the focus of their founders to provide all 3 things – desirable product, viable product and feasible product – together in a unified product.
This is an extract from Saurabh Jain's book - Startup Canvas, available on Amazon