"What's the most important thing to get right when you're starting a business? I think it's knowing the answers to three basic questions:
- Who is (or will be) your customer?
- What problem will you solve for them? What product or service are you delivering and how will that change their life or business?
- Will they pay enough for it that you can make money?
At Constant Contact, the first two questions were easy for us. Our passion for small business and nonprofits drove the formation of the company. And our first product, email marketing, helped those small businesses and nonprofits stay connected to their customers, clients, and members to drive repeat sales and referrals. Questions 1 and 2 - check! Question 3 was a lot harder. We knew the solution had to be really affordable (we start at $15 a month). We also learned that this audience was going to need some coaching and support. Could we make money at $15 while offering free unlimited coaching and support? This drove us to think hard about the economics of every aspect of our business but eventually got us to the answer - yes!"
Check out these previous Startup Tips:
Priceline's Jeff Hoffman: The Best Way to Design New Products and Service
Angie Hicks: The One Thing a Startup Entrepreneur Must Never Do
Aaron Patzer: The Most Common Entrepreneurial Fear and Why You Must Ignore It