This week I referred to something I read in a post by Dave McClure back in December on two separate occasions when discussing the importance of building a product that can have an impact in the marketplace.
The first time was at a coffee with a respected marketing consultant. She expressed frustration that one of her startup clients really just wanted to build ‘cool stuff’ and figured the sheer coolness of it would be enough to eventually figure out the business model. She seethed that this team had “a solution searching for a problem.” She wondered how to snap them out of this ‘build it and they will come’ mentality.
The second time was in a discussion about Pinterest. A successful CTO I spoke to said, “you know I like Pinterest, but I don’t really understand the valuation”. For those who don’t follow these things, Pintrest recently raised a $27 million Series B (total of $37.5 million raised) at a rumored $200 million pre-money valuation.
In both cases I simply repeated what Dave said, ‘great products and do 1 of 3 things: get you laid, get you paid, get you made’. Consciously or not this was reference to Maslow’s Hierarchy of needs – first physiological (food, water, etc.), then safety, then love and belonging, the esteem and finally self actualization. It boils down to: Laid, Paid, Made.
To me the context of both of the above discussions is driven by the understanding of how a product taps into the psychological and emotional needs of humans. About a new product, an entrepreneurs should ask his or herself: which of the following does my product do?
- help drive commerce by solving a problem
- increase the quality or quantity interpersonal relationships
- build a persons self-esteem or self-confidence
- spark creativity
- spark desire
- keeps people safe
This might seem obvious, but if the answer isn’t one or more of the above, this is not a product to start a business around.
So if I’m the marketing consultant I ask my ‘cool stuff’ entrepreneurs to have a conversation about the needs that the product fulfills. I make them tell me how the product gets me laid, made or paid.
And to the CTO I say that Pinterest does 5 of the above 6 things. Whether the users own the products, movies, books they have pinned they are telling people what they think is cool and what they aspire to have. Whether they have been to the places or eaten that food they have pinned, they are defining beauty in their own eyes. Pinterest sparks personal creativity and desire. In addition it can act as a sales tool for vendors, creatives and designers. and of course there is a social aspect to it. So I don’t know if $200 million pre-money is right or wrong, but I can at least understand it.
The point is make sure your product is going to have an impact in the marketplace.