Product Opportunities: Finding the Crossroads
There are a lot of factors which go into building a successful product, not the least of which is finding the right idea to pursue. Every idea you have burns cycles to validate. By this, I mean that if you have a vision for a product, you have to take the time to figure out if the opportunity is real. This is called market validation. The problem is that market validation is a time consuming and often expensive process. Before you undertake such an effort, you want to apply some kind of sift to know that it addresses some minimal criteria.
I have found that the first of these criteria is to answer the question “Does this product sit at a crossroads?” A traditional definition of a crossroads is a place where roads meet. With respect to products, it refers to something that a lot of people must do or replace or create in order to perform a specific task.
A practical example of this is the fact that all SaaS (Software as a Service) portals need to support payments. Working with the individual credit card companies plus other services such as PayPal means that each payment service must be integrated one by one. Many companies caught on to the fact that this is an extremely long and expensive process, so centralized payment gateways started offering the services in one easy to integrate process. The cost savings and easy integration meant that companies such as Stripe found a lot of willing participants. They found the crossroads: the problem that a lot of people needed to solve to have a successful business.
The beauty of this outlook is it applies to almost any market.
It is not the only criteria to apply to a good business idea, but it is an important one. Most of the successful products we have seen and experienced have addressed this issue. MINT.com addresses the essential problem of how finances are managed. This is a crossroads that all consumers who are concerned with managing their finances come to. My own father used to manage his finances on hand written spreadsheets – can you imagine the time it takes to do that? How much time could he save by simply using automated software to replace pieces of paper?
Zendesk addresses the essential problem of how companies manage their customer documentation. In the past, when creating software, a company would have to create manuals and web pages to present them. The funny thing is that most companies had to solve the same problem through their own development efforts. ZenDesk saw that problem and said; “Your time is better spent creating your software rather than inventing ways to host your documentation.”
The best crossroads are the ones that add economies of scale to the businesses or people that use them.
Consider finding your crossroads and developing a product that fits it. But, keep in mind that before you do, you look at other elements of what makes a great product - features, price, available market, etc.