I ask one question to determine whether a new company has a future. The 15-second answer tells me all I need to know.
When entrepreneurs ask us to evaluate business ideas, we always respond first with the same question: “What problem will your new venture solve?” Their one-or two-sentence answers—10 or 15 seconds at the most—are often enough to predict the future.
Too frequently, entrepreneurs quickly get sidetracked talking about things like the amazing technology they hope to use, the fantastic team members they’ll be working with, or the resources they hope to leverage. But, if they answer like that chances are they’re set up for failure. Why? Because a new venture—any venture—needs focus. It needs a purpose. It has to solve an important customer problem and in some small way, improve the world. Otherwise, what’s the point?
Think of some of the most successful companies in the world. For the truly great ones, you can probably describe their reason for existing very quickly, and articulate the customer pain they solve. For example, Apple’s reason for existing isn’t to build computers and devices. It’s to solve a customer problem—lack of control over technology.