How To Find Winning SaaS Ideas In 2025 (No BS)

so what have I told you that one of the biggest reasons SAS startups fail is not because they can't raise investment it's not because they have too many competitors in the market it's simply because they build something people don't want and subsequently fail to solve for product Market fit and the tough part about this is that most startups don't realize this until they're several months into their Journey because they have some level of Revenue they have some level of growth that justifies their continued Focus but without a serious change or pivot they're never going to be able to achieve breakout success and the reason is simple if you want a life-changing outcome like $10 million in ARR with high profit margins then you must build something remarkable and not an undifferentiated company or product and quite often this involves having an unfair advantage or a Unique Edge that puts you ahead of everyone else so in this video I'm going to be walking you through a framework that will help you in those very very early stages of validating your startup so you can uncover these urgent problems you can find that edge and personally as a Founder you can have that confidence that the next several years of your life that you're willing to invest in this startup are not going to be for nothing they're not going to go to waste so before I jump into it because I have a habit habit of creating um unhealthily Long YouTube videos just to show you some evidence that this stuff works I'm not going to go through all of this one by one um but you can feel free to pause the screen or or pause the video uh take a screenshot and you can see a lot of these videos on my YouTube channel as well so who this is relevant for so typically the founders we work with at grossas have these problems so they're struggling to have conversations with their ICP they're trying to acquire their first group of customers they have customers but they're struggling to acquire more prospects aren't take my money excited or they're unwilling to commit you're getting those like soft yeses or you know this is interesting but um people aren't willing to commit with their money being pulled in 101 different directions but don't know where to focus don't have any replicable customer case studies right you're not able to repeatedly get results for your customers that's probably going to be measured by Port activation and retention rates usually they do have these attributes and expectations so these Founders are willing to do whatever it takes they understand that remarkable outcome such as 10 million in AR requires building a remarkable business so not just uh an undifferentiated widget or an undifferentiated product actually building something that's unique and people love they move at the speed of light they don't focus on low leverage low impact um you know uh unproductive things and they're okay with doing the hard things right what I'm about to talk through in this video isn't sexy it's grunt work but I promise you it's going to save you a lot of money and headache if you follow it like a maniac um so after working with over 50 B2B startups here are the negative patterns I've noticed and this is just so you can avoid so too much time spent on product and not enough on learning from the customer and the market not building with a clear Market customer and problem in mind prematurely scaling without having fundamentals solved such as product positioning ICP product wedge and retention and thinking remarkable outcomes can be achieved without being in a top 0.1% right this requires so much more work than people think and I think the reason why is because of um survivorship bias we see these companies that are doing so well and we think if they do it um it must be easy um and I think everyone has that in them they are capable but I think they just um underestimate how much work it's going to take and the thing about these bullet points is that not a single founder and I've spoken with hundreds of Founders I've I've worked directly with over 50 but not a single founder who makes these mistakes think they are doing so right every single founder thinks their situation is different these rules don't apply to me and so you just need to be aware of these biases right we all have them we all think I'm unique I'm indestructible these r rules don't apply to me right no founder I've spoken with thingss that um making these problems when they all have been now why do these points matter because like I said building a remarkable company is extremely difficult right not many people get to 1 million AR you know let alone 10 million in ER this is like world class um level so I'm not here to you I'm not going to offer you startup junk food that feels good but doesn't actually help you achieve your goals right startup junk food like this like teaching you to scrape Reddit and just copy competitors and giving you a database of winning SAS ideas that don't mean anything right that's not what you're going to um get on on my channel so jumping into it so overview explanation of individual components and key Concepts so we're going to focus on the first stage within this framework I think it's a four or five-part framework so I can confidently attribute most problems that startups who we work with have are related to skipping or not being thorough enough and these early stages and like I said at the beginning the tough part about this is Founders might have a decent level of Revenue it might be 50k run rate it might be 500k it might even be 1 million in AR but because they haven't solved these fundamentals you know they haven't huge scaling issues and it's really tough to tell a Founder who's doing 500k a year a million dollars a year that actually you know it's because you haven't solved these fundamentals everyone loves to focus on the sexy tactics how do I write better Cod emails how do I do better ads nobody wants to address the elephant in the room that is hey do you actually have strong product Market fit have you actually built something unique are you actually differentiated against competitors right so my content is all about addressing the elephant in the room so we're going to be focusing on stage one which is problem solution fit right so we're going to validate that a definable group of people have a pressing problem and your solution concept or wedge resonates enough to get at least a couple of pilot commitments right um so inherently going to be for those at the earli stages but I strongly believe you know even if you have Revenue you have customers even if you have team members and you're doing okay I think this is still worth paying attention to because the reason why most companies struggle to scale is because they haven't solved for these fundamentals so just quick overview uh so problem solution fit that's the stage gate one is going to be Market hypothesis and problem Clarity gate two is going to be message hypothesis and differentiation and uh gate three is going to be minimal lovable products and early commitments right so I'm going to break down each one of these um so they're going to be these stages and then there's going to be milestones and activities for you to complete along with verification steps so you know when to proceed and then there's going to be a bunch of resources to help you move faster right so there you know very objective verification steps of have you done this if you haven't done this then you need to go back um and do it before proceed and it's just to stop those sort of cracks appearing um and enable you to scale when the the time comes the reason we narrow down on these stages is simple right neglect these fundamentals and you'll accumulate what I call growth debt which are these sort of extra headaches and obstacles that are eventually going to bite you in the ass when you try to scale and this growth there it grows exponentially right the the bigger you get without addressing it the more it's going to hurt and in a real sense that means probably letting go of members um having to have a huge pivot when you have complexity in your business such as process Automation and people you know those changes in Direction become um a lot more difficult so I often speak with Founders who believe they should be doing X which could be you know hiring a salesperson when in reality they should focus on Y and Z like nailing a primary growth channel for predictable lead flow so that sales rep actually has deals um they can close or defining a basic sales process so you're not throwing that sales rep into the deep end and they actually have something to follow ideally a framework that you as the founder have developed and you have a proof of concept right a lot of mistakes happen here when you Chuck early employees into an unproven area um and it can happen you can do that sorry there are people out there who who sort of thrive in those situations but they um as an early stage startup you probably can't afford the those type of people um so some common examples of this include delegating a function such such as marketing or a task such as Cod email before establishing a working proof of concept you know hiring an agency oh this lead generation agency will solve all of our growth problems doesn't happen pre-product Market fit uh publicly launch into a mass Market without first validating the ICP and proof of impact within uh with a controlled group right if your product uh cannot deliver impact to a controlled group of people I.E people that are warm you have like um some kind of relation ship with not friendss or family but you know people within your network if your product can't deliver an impact to them when you have so much involvement it's not going to have an impact to a MTH Market audience that you know you can't hold their hand worrying about Channel tactics when the value proposition isn't differentiated and lacks of wedge I.E these are fundamental business and strategy issues you know Channel tactics are like the 10 20% right being built on strong um you know fundamentals is is the the 80% that matters when you solve this stuff this stuff almost becomes much easier um and you can when this stuff is solved you can make when you have like strong product Market fit and you've built something differentiated and you've you validated those fundamentals honestly you can make so many mistakes and you can still win like that's how um powerful powerful it is put simply startups are worrying about breaking a sub for marathon when they've only just learned to walk right so some key Concepts use for res SES here I'm looking at the time here I think this video is going to go way over um so linear growth versus sustainable growth right so as an early stage startup who's trying to acquire its first group of customers you should be focused on linear growth tactics right such as reaching out to your network sending onetoone Outreach and engaging in communities right by linear growth what I mean is your outputs are proportional to your inputs right so the more messages you send the more replies you receive the more conversations you have the more customers you get Versa right um now a lot of Founders really struggle with this um and I think maybe because being a Founder is something that's been glorified it used to be this you know what sort of um you know Outsiders would do nerds you know Misfits and I think there's still parts of that today but I think it's been glorified through content and I think the implication of this is that people forget how much hard work it actually involves and being brutally honest a lot of people aren't willing to put in that hard work right and so I'm of the opinion and I'm happy to be proved wrong on any of this that words like automation delegation and Outsourcing should not be in your vocabulary at this stage right you need to do the manual work um it simply requires sheer energy from you as the founder right nobody's going to be as motivated uh incentivized or delusional as you to do this right you need that sort of um tox toxic optimism to to make it as a make it as a Founder right because every single day it feels like the whole world around around you is burning um and so if you can't get through that then you know somebody you're paying a flat retainer per month or a low salary they're they're certainly not going to get through it as well right and so attempting to avoid this each phase which I call it by introducing automation or delegating growth to an employee or or a third party it's going to it often ends badly and comes at cost and where I see this happen most is you know startup that's pre product Market fit you know they're stagnating and they try to bring in an agency to fix that and the elephant in the room is there there's a reason you're stagnating it's probably because the product is not differentiated your you know you don't truly know the ICP which is impacting your position in a messaging you know those are the huge problems um bringing in an agency to send some cold emails isn't going to fix that right um okay yeah so of course linear growth is unsustainable um and so it should be modified as you gain that initial group of customers and your product improves as a of feedback that's when you then progress to sustainable growth which is typically facilitated through what I call growth Loops right so linear growth inputs proportional to outputs uh growth Loops are self-reinforcing systems right so they enable nonlinear growth where the outputs can be disproportionate to the inputs right this is how exponential growth happens um now don't be fooled uh creating growth Loops is a big task um and it will likely fail if you do it too early you know if the product is bad if U you haven't got got like good product um product Channel fit if you haven't truly validated the ICP all of these things are going to break your um growth Loops right so only aim for sustainability after you have solid traction and you enter what I call pmf Discovery which is those earlier stages you haven't made it you're not out of the E ship phase just yet but you know you finally feel the momentum starting to switch until then it's manual it's founder leading the charge marketing and sales and um linear growth tactics right and this works here are some Founders that um were really struggling to have conversations with their ICP and and get customers um I have an entire method wrapped around this and when I shared that with them um you know things changed so that's lar growth versus sustainable growth now another key concept here is the five core components of a business so product Market fit might be the ultimate goal but underneath product Market fit there are these several different um micro areas that must be um solved and I I refer to these as the five core components of a business right we have the customer and jobs we have the value proposition we have the model we have the solution and we have the growth channel right each of these components consists of activities to be completed hypotheses to be formed validated and refined right and so at any given point while you're in pre-product Market fit hell it's likely that you're trying to validate at least one of these five components right every conversation you're having you should have that in your mind that okay what am I trying to validate what's the what's the weakest or the riskiest assumption I have about my business at the moment how can I validate that in this conversation right and so in every conversation you're having you're trying to stress test these um because you know at any given time we have these assumptions I think this is the customer I think this is what they care about I think this is why they would buy I think this is what the product needs to be I think this is what um we should charge these are all assumptions and so every conversation you when you're trying to validate these assumptions until you have that level of confidence um to execute right so just explaining these um components so the customer and jobs this covers both the company and Persona that will be involved in the purchase can often involve multiple customer types um so in B2B you might have an end user you might have a champion you might have a decision maker right these are all different um customer types um why I say jobs and not problem is because problems are cheap right we all have problems we you know just think about your own problems right now you probably have several of them that doesn't necessarily mean you're willing to pay money to solve those problems it doesn't necessarily mean they are Urgent right got like you know collecting post you know it's a problem you need to do it but you can't be asked um and you know it takes you weeks to finally get your ass down to the post office right and so that's why digging for problems isn't good enough you need to understand uh the jobs the jobs to be done um that your customers have because it forces you to think about the the customers functional problems in their priorities and their projects like you know they've got 10 problems on their to-do list their hypothetical to-do list what project or trigger event forces you know problems to come to the top of that to-do list you know what forces them to have those levels of urgency that are going to make them um go in market and look for a product we're trying to get to that level of detail the value proposition So This Ss what do you do and how does it benefit me so it Bridges uh the customer and your solution the model how when what and the amount you charge the solution so this is comprised of your product and any additions you might have such as Professional Services these fulfill the promise made in your value proposition and then growth Channel how you intend to reach and convert customers um right let's go this so relationship and refinement of components so each component is dependent on the one before it right so example you can't create an effective value proposition without first deeply understanding the customer and their jobs to be done and so as such you should attempt to validate a component to a degree at which you have the confidence and data to proceed to the next component right all begins with the customer right otherwise how do you know what product to build how do you know what they're attracted to how do you know how much money they're willing to charge right and I think the fundamental issue here is that most startup Founders start here this would be a cool idea I'm going to build this product how can I force people to buy that so each component could be iterated so you just can uh consider this as an example the a customer is a pmm product marketing manager within an early stage startup value proposition one is related to the enablement of product launches but you notice a different problem set related to competitive intelligence which is also a pmn's responsibility with a higher willingness to pay which becomes value proposition too right so we've iterate we've the the customer has remained constant but we've iterated the value proposition okay um I've said that here so this might impact subsequent components EG if the problem is bigger or it's a problem alog together then the solution needs to look different to solve that problem right or you might be able to charge more money because that second iteration of the problem is uh bigger more urgent and so therefore you can charge more money right so just to keep that in mind is that you might iterate through any given component multiple or several times until you arrive at that sweet spot where you feel like you found product Market fit um I'm not going to go through this this is a key part of this video contuct and condu structured interviews if if insights are the output you're looking for then conversations are the input that you need to get there um what I'm going to do with this I'm going to leave a link in the description um so that you can download our complete method for these interviews the questions you need to ask how you need to approach these structured interviews so you are stress testing those assumptions and that every conversation you're having is getting you a step further um to Insight so um okay yeah so a bit more about this uh stage so this is is validating your Market assumptions forming a strong value prop before committing months of time and money to build a product that nobody wants why it matters because a biggest reason startups fail is a lack of pmf which comes as a result of not validating fundamentals enough the goal in this stage then is confirm is a definable group of people with a pressing problem and that your solution resonates enough to get commitments the gates we're going to go through in this stage Market hypothesis and problem Clarity message hypothesis and differentiation minable minable lovable product and early commitment um and just basically I'm rushing through this slightly now but um you know just to hit this point home you know a Founder recently got in touch with me quit his high pay in cyber security job moved to Dubai you know probably getting paid hundreds of thousands of dollars um a month quit that job to start a software company had basically pumped all of his life savings into building this product said lur Liam struggling to grow can help turns out hadn't spoken with a single person to try validate the problem or the product didn't have a wait list didn't have any um beta customers or design Partners just kind of you know head down build the product um and you know obviously it didn't work out well with him I think he actually had to quit the project and and go back and get a job right so this is really the stakes that are here you know for Founders right it can financially wreck you if you approach it in the wrong way and you can just end up building something that nobody wants so jumping into gate one which is Market hypothesis and problem Clarity so your situation is you have zero on near zero paying customers and you're forming initial assumptions about who you want to serve and what problems you want to solve right so going to go through for each of these Gates consider these Gates as like Milestones within the stage key Concepts to understand which is sort of like strategy activities so the actual things you do which is more like tactics and execution and then verification which is how do you know you've completed this stage right so it's very objective it's not based on what you feel it's like have you done the work okay yes proceed no you know go back and and do more work so you're going to be going through three Gates Right gate one gate two gate three so gate one then key Concepts to understand so completing structured interviews this is basically just um talking about structured interviews so um in in the early stages I think a common mistake Founders make is that they go into these conversations they start you know they share their screen and they just start talking through their product right you should not be entering these conversations for the product first mindset are talking about your features talking about Integrations talking about you know even showing your product instead the objective in these conversations is to learn right learn more about the customer learn more about the problems they have and the jobs to be done and learn more about the value propositions they care about like really you shouldn't be showing the product until you've had like a couple or a few dozen struct structured interviews right a huge mistake that um Founders make and as I said here um always trying to stress test or validate the five core components uh in these conversations as time goes on validate the component or Associated hypothesis you deem to be the risk riskiest right so what I mean by that is if we've got the five core components of a business here at any given time one of these is going to be the risk is you know okay clear on the customer their jobs to be done clear on what they would find valuable just really not sure on how we deliver that through the product I.E that the capabilities and the features that the product needs right so any you through these interviews you're always trying to validate the riskiest assumptions um that you have again if you want access to the method and um script for these interviews just comment below or I'll try to put a link in the description talked about this before focus on the jobs to be done not only problems and you know we all have problems but there doesn't necessarily mean we're willing to pay money or time on solving those problems and narrowing your focus so this is really important one and and something that people pay lip service to is that even if your product can inherently Target a broad audience or if you build your dream uh to build your dream $1 million company you need to attract tens of thousands of customers you should still start small right this is going to allow you to find a good wedge I see this all the time happens more frequently with horizontal startups um so horizontal startup is a startup that can serve you know um different verticals um so something like a cold email tool or something to do with like data you know recruitment industry can use that software industry can use that healthcare industry right it's a horizontal startup but for success of a horizontal startups you should still start with one vertical you know One customer one problem and then over time expand to the different verticals and so when I say narrow and your focus this can either apply to the customer um so just trying to make one customer successful and I mean that literally um you know you can have this Grand Vision of how you're going to get to $100 million but if you can't make one customer successful you know you can't make one customer happy enough that they will give you a testimony or case study then you're going to really struggle um to make anyone else happy right n in uh on the problem so um you know to make this customer successful you're probably going to have to focus on a very specific problem this is a an issue experienced across all types of businesses agencies software companies e-commerce you know when you're trying to solve too many problems at once you're just doing an okay job at all of those problems but to succeed and reach strong product Market Fe you need to do a great job um at solving one problem and then Nar your focus on a solution right building a great product is tough and so you don't want to make it difficult by over complicating things just trying to do too many things out of the gate right so that's what I mean by narrowing your focus now I've used the word wedge um a few times so a wedge focuses on a specific problem of feature that is not adequately addressed by current Solutions and it serves as a narrow entry point where energy can be concentrated right so the wedge aims to differentiate and gain initial users by addressing a unique pain point so in simple terms your product does one thing very well to get an initial foothold small area of focus which results in high concentration of impact right here's a guy cracking open you know a multi-ton rock with with a hammer a sledgehammer and some wedges right because these wedges allow him to concentrate his Force into a specific area which then expands and splits The Rock right if he just started hacking at this rock with hammers even if like 10 guys started hacking at this rock just with hammers all all around the place right they wouldn't be able to split it down the middle like this and so some examples in practice of wedges so twilio started with an API to do SMS it's now a 10 billion public company that is the go-to communication platform stripe started with payment apis for startups now it's one of the default payment providers for online businesses and Clay which is a recognizable name over the last few years they niched down to outbound use cases for lead generation agencies now once they've reached you know six 6X growth and 10x growth year on year now they're expanding to other goto Market teams such as marketing or marketing Ops or rev Ops right if they try to do that out of the game they would have never achieved the success that they've had um today right so activities just make sure on the right one activities for um gate one so um Activity one you want to draft your hypothesis right and before speaking with customers you need to know what to speak with them about you need to have a strategy it's another mistake Founders make is they just kind of hopping in these conversations willy-nilly and not having a strategy you know what assumptions they're trying to validate what do they actually think the current value proposition is what what are their assumptions related to the customer right so physically write these down um it's important to have that stake in the ground U when you stress test and validate these core components and you have a point of reference you can go back and change the notes I thought it was this actually it's this um and it's actually good to have that paper trail um because amongst all the other things you need to deal with as a Founder it's easy to forget so to write these hypotheses um just cover the following points so for the customer and jobs you want the industry and Company attributes firmographics Target Persona demographics jobs to be done for this Persona what does an average week look like for this Persona right so a good test on whether you've actually solved this component is you could jump on a 60-minute industry related webinar or podcast or presentation and you could confidently handle any questions or topics thrown at you right so you basically need to understand your customer so much that you could pretend to be your customer um and because that's how deeply you understand them now to keep in mind particularly for the early stages is there are two customer categories to validate right so category one you have what called early evangelists right so these are likely customers that are in your network or audience and they're superheroes right um they understand things are Scrappy they understand your product might not be that great but they're willing to take a bet on you right these are like the early adopters um and they're willing to work closely with you to turn the product from Bad into something good that can then eventually attract future customers right and important to note here is that this is sort of a a misconception is that you know just because they're taking a bet on you um and willing to use your products and give feedback doesn't mean they should be your friends or family right they shouldn't be doing this as a favor they should roughly align with your ICP they should um be willing to to pay money um and you know they should have an urgent problem that you're SOL right so this isn't just like going to your friends and family like hey can you try this product and be an early evangelist these are you know people that have a problem you're solving we then have future customers so these are the best fit customers which when refined over time will materialize as your ideal customer profile right this is where you're going to get the most money the highest uh average revenue per user the highest highest ACV the highest um you know net dollar retention but initially um the the requirements from this sort of customer profile you probably can't fulfill yet right maybe they need a certain security certification or maybe they need certain um Enterprise features that it just wouldn't make sense for you to to build yet right so don't be disheartened if you can't attract this type of customer yet it will happen right as like you know wherever it was sort of those um those companies that Niche down first right um you know eventually they could go upm market to mid-market companies and Enterprise um companies but when you're stting starting inherently probably have you know your product probably isn't great you only have so many resources um and so it just doesn't make sense to go after these future customers yet and if they're saying no don't take that as like invalidating your hypothesis it could be that you're just targed in the wrong type of customers right so really important Nuance to to understand and if you're having these conversations and you're a Founder with a product now you you probably um can relate to what I'm talking about so the Val proposition then so to hypoth hypothesize these component cover the blow point so what benefits can we delivered to this Persona what makes this different to Alternatives and why now right heavily related to sort of the the projects uh under the the uh jobs to be done the model um so how will we monetize most common is going to be subscription how will we charge most common is going to be upfront of free trial what will we charge for most common are going to be usage based or features and what amount will we charge the solution so that's product features which are the technical aspect of your product the product capabilities so this is the action or steps that the feature enables Integrations Professional Services and delivery schedule how long is it going to take you to build and how much and then growth channel uh how will we reach customers how will we convert customers early thoughts on potential growth Loops right so get this all onto paper doesn't have to be physical paper put it in notion or a Google doc or something but have that stake in the ground um you know it just it's mind and how many people just don't sort of set the strategy or the vision of their company um before starting to build product second conduct structured interviews um so again I'm not going to cover that document learning and patent again this is a a huge thing right if you're heading in the wrong direction then change right um so as you have these conversations it's important to pause and reflect every so often right there's no use in having conversations with people if you're not using those convers ations to to develop insights and to inform your strategy right so look at the patterns challenge your previous assumptions are they right are they wrong refine them and then write down your conclusions right be intentional about everything you're doing um it's just such a waste like reaching out to people and having conversations and having calls is tough right and so just don't let them go to waste by taking them serious and and being intentional right so a rough sort of model here is you know after every 10 people you speak with just assess and adjust what the patterns do I need to update my assumptions speak with another 10 people assess and adjust right until you end at that point where like you're confident who the customer is and what you need to build and what they care about and so some questions to ask yourself are they reacting positively if so what gets their attention are there any patterns with regards to what Persona types react positively what changes are needed can you accurately describe what an early evangelist and future customer looks like do you need to refine your approach or a complete pivot right this is a very much a real option here um that I think too many companies avoid for for too long right so summarize the top two to three problems that are being repeated and then rank them in the order of urgency again this is something we cover in the structured interviews method of kind of um stack ranking the problems um that you're trying to solve so verification for this uh Milestone within stage one you've had 10 to 15 structured interviews and can effectively share patterns that merged you can can articulate a crisp problem statement right you actually know the problem you're going after and it sounds simple but um most people struggle to do this without being vague and Abstract um so I've got a framework here for breaking down a problem statement I think I've got I'll just skip to the end so an example in practice of a good thorough problem statement in mid Market B2B SAS the VP of Market marketing is responsible for generating a steady volume of qualified leads however these teams struggle with constantly Decay and Lead data over 30% of contact info is outdated within a quarter this leads to wasted ad spend lower pipeline efficiency and frustrated sales reps who chase leads that aren't a fit most rely on manual data cleaning or generic data enrichment tools that are expensive and poorly integrated as lead volume grows in a competitive market these manual processes can't scale marketing leaders are now risking missed quotas and high ch and if they don't fix the data issue quickly right this gives us a problem that the customer has right and we you know we've got Alternatives the implications of these problems right this is like what a good problem statement um looks like then we can think about the how that's solved but only first if we're clear on the problem all right so gate two message hypothesis and differentiation so situation by now is you have uh confirmed people have a problem after several structures interviews now you should form a value proposition that addresses it in a unique way right this is going to be your wedge so your testing whether Ral prect say yes this is different and we' love to try and we'd love to pay you money right now just know obviously I've just I'm just reading through a dock here um going from one stage to the next like in reality you as a Founder this can take several weeks potentially months depending on you know how fast you execute right so just be really conscious that you should be verifying Milestone one before you progress um to the next one so similar format key Concepts activities and verification I think the following gates are shorter than the first so key concept to understand um for gate two first one is value propositions right so a value proposition clearly describes how your product benefits users it answers the what do I get from this question and can be delivered in different formats a huge mistake Founders make is ideating or W in value propositions based on their intuition rather than real data from research or another way to put it based um rather than their customers and their problems if you're writing random value propositions based on what you think sounds good you're doing it wrong and this will often result in vague high level business outcomes that sound applicable to any B2B business rather than your specific company right I've had this a lot founder will tell me their products value proposition and it's very easy to kind of Nod your head and be like yep sounds good sounds legit right but it's never never specific enough and I think um a struggle that Founders make is trying to distinguish between like the company Vision this is how we're going to take on the world and you know achieve this huge outcome um distinguishing between that which is what they sell to investors and internal team members and you know peers to the value proposition that your product has today which is specific it's specific to the comp uh to the customers problems right the customer doesn't care how you're going to how much money you're going to make or how big of a company you're going to be right they just care about how you help them finish their project and um help them you know not get fired or achieve their objectives right so the three inputs required to create a value proposition we've got product capabilities features and um benefits right a quick side note here messaging is not copy right messaging is the what whereas copy is the how and can be tailored based on Persona Channel geography Etc right so don't worry when your um thinking about your value proposition your messaging don't don't worry if it doesn't sound sexy a lot of this stuff is just internal going through the motions building those solid foundations when it comes to putting it on your website or putting it on any channel email uh social Etc that's when you can then um tweak it right so very simple value prop statement we help ICP sve Problem by unique approach so they can outcome and there's many ways to skin this cat I might even have a a different one um in a minute so product capability so a product capability is the action or series of actions that's enabled by a feature right and they usually begin with a verb because they are action oriented and um I think product capabilities are a cheat code to Clarity because it forces you to stop thinking about features I.E um you know the technical impressive aspects of your product and it forces you to think about the functional reasons why a customer would hire your product right you know that um customers are often purchased in software to achieve some kind of functional workflow right and so capabilities nicely connect with that so some examples use custom filters to find exact customer case studies you need I've just pulled these from random companies uh give your reps a self-served library of customer evidence send AI generated messages to your email sending tool in seconds right these are all examples of capab capabilities right beginning with a verb action oriented right the the champion that is um browsing your website they're probably probably not directly linked or responsible for the company's Revenue right they just care about the problem that they're trying to solve the problem that they're responsible for product features and so this is the technical aspect of a product noticed how by themselves they don't provide much context they are worthless alone in the eyes of the prospect because they don't s for that implication that's so what so some examples this is the capability this is the feature custom filters case study library right capability feature instantly integration right by themselves it doesn't it doesn't solve for that implication okay what can I do what can I do with this how does it help me Product benefits then so the outcome realized by the user when they use the product right so some examples Save hours sifting through internal drives for Relevant case studies improve opportunity win rates launch High performing codl campaigns faster right notice how nothing here says increase your Revenue increase R increase you know um whatever which are all business out outcomes and I think I talk about that in just a second right we're speaking to the functional benefits that the customer is hiring the product for okay so then turning these inputs into value propositions which is where we bridge that capability to the benefit um we help ICP solve problem by unique approach typically unique approach is going to be one of the primary product capabilities that you have uh so they can outcome right what they're hiring your product can do so we talked on this briefly um business outcomes versus benefits none of these explicitly mention Revenue right and this is because revenue is a business outcome which is the responsibility of the CEO or the founder or um you know cxos the se- level leaders right if you're targeting SNB sort of 20 employees and above midmarket or Enterprise you won't be speaking to the CEO or even cxos right um because they don't go around browsing software company websites and booking demos right they have teams to do that for them right they have department heads midlevel managers and and ic's individual contributors who are doing that on their behalf right but those cxos might come into the conversation at a later point and that's when they're going to care more about the impact of the business right but the cxo isn't going to care about you know um saving hours um you know sifting through Google Drive they're going to care more about the business impact um but you don't put that stuff on your website right so benefits are more specific and tangible I I middle and often senior managers don't vitally care about business outcomes right they care about their own goals and their own activities and their own projects and hitting their okrs right that's what they care about um and so talking too much about business outcomes can result in messaging that doesn't resonate with your target personas right for example a sales rep is likely to care more about the four hours they're wasting in Salesforce every week updating CRM Fields um and caring more about their individual quota attainment than the company's overall Revenue right the sales rep just wants to earn as much money as possible and keep their job right and you know updating sales forces a pain in the ass that they feel every week and because their manager is on top of them these are the problems that they feel the things they care about they don't really care about if the company hits their overall Target as long as they hit their own right that's the C's problem that's the CEO's problem right this is how people um think now an A Point caveat here is that this is not to say that your product shouldn't be linked to business out comes right it should but you're just not communicating that through your channel messaging right this is what this is why sales processes exist because you're making that business case in the sales process but that's not the hook you use to get people um into the sales process now there is a lot of nuance there um um and sometimes it's actually the internal Champion that will create that business case for you and you know you know they like the product but they then have to justify that to their to their seniors and and make a business case and typically you would support important with that um but the Champions you know isn't going with your product because you're saying you can 10x their revenue um so value proposition enhances proof evidence of course makes everything you say more believable um uh pretty simple and then uniqueness right so if what you already if what you offer already exists in the market and doesn't feel novel you will struggle to receive positive feedback right so uniqueness can come from a new mechanism that your product offers like a new capability new way to cut cost and save time or an angle that nobody else has right differentiation um so concept number two positioning and contrarian Edge so positioning establishes your place in the market relative to existing Alternatives right and these Alternatives could be um other vendors could be do it-yourself Solutions I.E then manually solving the problem somehow you know um spreadsheets and and manual work or even you know inertia doing nothing right so I think a common mistake that um Founders make is they they think oh we're competing with this product and this product and this product sometimes you're you're actually competing with nothing like the the customer is just not solving that problem or they're using manual processes right so positioning answers the what makes you different question and without strong positioning your Target customer may lump you in with every other nice to have product or ignore you because you think they think you're the same as uh something they already use right just the point on positioning is I think um if if you're sat there like um I don't know what our value is I don't know who we compete against I don't know what the customer wants these are typically all positioning problems right so the nitty-gritty details of your product and your story don't matter if you can't hook someone's attention right away with good position right position influences the Market's perception of your company right and if you don't influence the Market's perception of your company something will right the prospect will create their own perception or a competitor will set the perception right so this is really really this is why product position is really really important because it um influences ideally controls the market perception of your company um yeah and side note if a prospect Compares you to something that you're either not competing with or you're better than this is a position issue they don't know what bucket um to put you in uh so primary types of positioning we've got audience-based position um and then we have compet based uh position right so two types so just to talk through these um I'd say audience-based positioning is the best option for Founders uh unless you're a Serial entrepreneur you've built um uh multiple companies before and you know exactly what game you're getting into um so this starts with your audience um and then there are sort of two subtypes within this positioning there's product Le and competition Le so in product Le audience-based positioning you begin with a clear picture of your audience you figure out how you can solve a problem for them and then you differentiate against existing Solutions right in competition Le audience space positioning you begin with a clear picture of your audience so it all starts with the audience however you then identify what solutions they are currently using so you know what the alternatives are and then you discover something you can do that other that the existing Solutions cannot right so slight Nuance I got that visualized here oh we're making mistakes here um so example of product Le audience-based positioning you know you want to Target pmm at mid-market B2B SAS companies you discovered that Gathering competitive intelligence is expensive and time consuming you believe aggregating and combining a contextual layer I so what to multiple data sources could give pmm better and faster insights existing competitors are expensive and focus on one data source I.E such as monitoring your competitor's website changes and so potential option is to aggregate these data sources in one platform and offer orchest orchestration capabilities so basically automating the next steps of that right this is an example competition based positioning so this is ideal if you deeply understand the market and have been able to identify gaps in existing products right so their weakness becomes your strength their weakness becomes your wedge um so this type of position breaks into two subcategories audience Le and product Le so in audience Le competition based positioning you begin with an understanding of existing products so it starts with your competive s you identify a specific Market segment uh that use those products and then you find an area they're underserved and then in product Le competition based positioning you begin with an understanding of existing products identify where your product fills an unders serve Gap and then find a specific Market segment to go after with this capability all right let me know if you want to go deeper on positioning because it's something I spend a lot of time on um and I think can get complicated um so an example of product Le competition B positioning 6 cents is an ABM account-based marketing platform one of its product capabilities is identifying accounts that visit your website right I don't actually know the ACV of 6 cents but I think it starts at around 50k RB Tob which is a new startup realized that company level identification isn't very useful person level identification is far more valuable and so they focus there right so company level identification is hey uh Google visited your website right it's like okay okay well Google has like tens of thousands of employees like doesn't really tell you a lot right and so then your sales team just goes out and hammers everyone at Google whereas person level identification is hey Jane the VP of marketing from Google just visited your website well now all you have to do is reach out to Jane right um and so that's the Gap that RB to be found and served and you know I think they're doing like a product LE model $99 a month you know for people that have this pain for 6 cents this is just an absolute no-brainer uh RB Tob grew to like 4 million AR in however long 6 months or or 12 months or something right and so position allows you to control the Market's perception um and gives your company uh an identity right an amplifier so kind of a separate but related concept to position is a contrarian Edge right so this is where you find uh when your product on message challenges a common assumption or standard practice in your market right so it makes prospects think finally someone sees things differently is actually soling it the right way right so um rbb is actually another good example of this with contrarian Edge is part of their marketing was actually calling out six cents I think they even um uh got um a cease and assist letter from six cents right and it benefited them I mean r B2B did very well because of it and that was their contrarian Edge was like hey you're paying you know $50,000 a year for a product that is basically crap um we're doing it for $99 a month um and so that was their contan Edge you know not the normal thing to do on social you know explicitly call out competitors um you know you might be for or against that but I did give them an edge it got attention and you know no doubt they they profited from that attention as well so some examples of contan edge could be price or business model could be just philosophy I.E AE uh AI is the hot topic of the day you could be like well you know we're not being going to be a AI first or you know um all of our competitors have ai chat spots on their website well we're actually going to allow you to speak with a human um and that could be sort of your philosophy um and yeah just some tips on how to find your contrarian Edge that's enough there moving on um so some activities then in this gate uh so drafting your wedge feedback and refinement so drafting your wedge uh so if you've done the previous activities and conducted enough structured interviews you should have Clarity with regards to how your product is communicated I think why most people trip up find it difficult or unable to effectively communicate the product is because they haven't done the research which results in things being fuzzy so they just throw at a wall and hope it sticks right if this is you I think a good rule of thumb and it might not be great for all situations but if as a Founder you're ever feeling confused you know you don't know what to build um maybe grow is stagnated I think a good rule of thumb is just to speak with more of your customers and if you don't customers um speak to your Market just have more conversation with your Market whether that be ICP whether that be influencers whether that be uh peers just have more conversations and I you know people aren't going to put it on a plate for you but I think you will get to that point of clarity um just speak with more people you know it's just crazy how many people I um I've I've spoken with or worked with where they just haven't validated their assumptions you know they've built an entire product or an entire feature without thinking to validate that first and and see is this actually what people want so on the other hand you might have had dozens of conversations so therefore have a clear idea of what problems your customer has and an effective way to solve them but you still struggle to communicate that right this is okay and a much better position to be in than the former should be than poor English uh because the foundations are there but you just need the final 10 to 20% of refinement right don't conflate these two situations one situation is you don't actually know the problems you don't actually know the customer situation two is you know the customer you know the problems you're just really struggling to communicate that right so a template for communicating your wedge with shared in your value prop we help ICP solve problem by unique approach generally you know the unique approach is this your differentiated product so they can outcome getting feedback communicate this wedge to over 10 people as part of your structured interviews and then what you're doing is you're looking for that positive feedback or negative feedback any kind of Fe feedback is you know that's interesting yeah we'd love to try this how can we sign up or on the other hand yeah yeah this doesn't really excite me too much um or any sort of level of feedback where they're not willing to commit you know there should be um a reason for that refinement if nobody sees it as unique or interesting refine and then conduct more structured interviews note what they specifically push back on um and don't take the response at face value dig for specific so a kind of mental model I use um when speaking with anyone about my product um whether it be research whether it be friends peers customers is uh the mental model I use is imagine this person is the worst product manager in the world are you they don't know they just don't know how to build a good product um and it just forces you to not take what they say at face value because everyone has an opinion right doesn't mean it's right um it just forces you to go deeper really get to the root cause of their opinion or or their feedback and quite often that's where the gold is right and so you know everyone everyone will happily tell you what features to build and um this looks good or this doesn't right um You need to go deeper and get to the the first principles and then and then build from there rather than taking everyone's opinion at uh face value so how to verify this gate or this Milestone um so at least two to three prospects have verbally said that's new different and they've expressed willingness to pay this actually should be and right that's what we're pushing for um right because without this ultimately this is what it matters about we're not just looking for oh that sounds cool yeah keep us in touch it's like no are you willing to pay money for this and have that problem solved and you have a concise a statement that you can show an advisor or found appear here and it passes a sniff test right you can put your um your value proposition or your wedge in front of people and like holy this is actually unique yeah I think this would kill it right and of course that's just qualitative feedback doesn't necessarily mean your product's going to be a winner but um you know there's there's some power there in sort of an initial sniff test and ideally the person you're speaking to understands the problem themselves as well so final gate here then um so minimal lovable product and early commitments right so situation here is that most Founders I speak with have actually just skipped straight to here they already have a minimal viable product would necessarily say it's lovable um this is quite common um so don't but it's just important that if you haven't already you do go through the prior steps you do the research you understand the problem you develop a wedge because if you know what uh the mistake that most Founders make who have skipped here is they just continue on this path building the wrong thing something that people don't want um and they just realize um too late so in this gate the objective is to build something that delivers the value proposition in the wedge right and this doesn't necessarily have to be a software product it can be a manual work around on no code right so really important Nuance is um you don't actually have to have a product at this point right at the end of the day people just want their problem solved they just want to achieve whatever job they're trying to achieve you know a lot of people don't care if they if they don't have to log a front end into into a user interface like a lot of people just want to offload the problem and have it solved and so you know by that token it doesn't have to be software so key Concepts to understand here minimal lovable product and proof of demand right so this is kind of where we get into the where it's just going to be very situation dependent I'm not going to go through here how to build an entire product end end you know front end backend database uh authentication all that kind of stuff is this is going to be really um tailored to your situation but just to kind of talk through it and conceptually so minimal lovable product so this is about building the minimal version of your products your product that's also lovable right so it's a spin on the classic MVP and the reason why is because what defines as viable has changed due to how much easier faster and cheaper it is to build products today right um and to put it bluntly is um people don't want to try crappy products right they just want to have their problem solved and if you're especially if you're building something that's uh not novel and you you say to a customer hey are you willing to try my kind of crappy product um but they have 10 products in the market that are similar kind of do maybe 80% of the job um but they're just far more developed and mature products and make their life easier they're probably going to take that choice right and so that's why it's Minal level has to actually be enjoyable and it has to um do the job better than other products right so I say a rule of thumb the more novel your wedge right so attractive and differentiated the more you can get away with it uh your product being minimal and the reason being is because you're just solving such an urgent problem in such a novel way that people are willing to ignore you know the SC crappiness and it it being Rough Around the Edges right because you're probably giving them an advantage and they just want that no matter what the less novel The more developed your product solution has to be because it's like that something already exists and so the bar is higher right and this so this is another fundamental issue with building something can differentiated is for a long while there's just going to be better products than you um that are solving the same problem and so it's just um it's just fundamentally better to be different I'd also remain open to the possibility of not requiring a product at this stage and instead doing things manually whether that be end to end or just behind the scenes right what we're doing here is we're just testing the core functionality I can I deliver the value proposition and will it deliver an impact to the customer right that's all we're trying to validate here we're not trying to validate do they like the design of my emails do they like the design of my user interface um you know do we need email verification do we need stripe all these kind of things you're not trying to validate you're just trying to validate core functionality right and those I talked about can easily feel like you're being productive and and trust me it's not um you need to validate the core functionality and so why this matters uh helps you avoid overbuilding right Founders often pour months and a lot of money into building extra features and MLP focuses only on the critical problem that you're solving right do you really need to focus time and effort building a great self- serve experience when you have low or no customers and will be working closely with them right no you don't speed and flexibility if you discover users want something different you can pivot quickly without having to scrap a big code base which there will be sort of um a sunken cost fallacy there uh customer Centric you learn more from the actual usage uh rather than assumptions right so even if some steps are manual like sending data from a spreadsheet you will see if the user cares enough to keep using it right which is really important this is another thing is like building the product is just step one do people actually use it do they activate do they return and keep using it that they make it part of their sort of weekly ritual um which is getting onto the the um next step in that framework okay so second key concept proof of demand so this is tangible evidence that users need your product and will invest time or money into it right so it's how you drisk uh any assumptions that you have now why this matters um willingness to pay is of course a strong signal you know actual dollars people put in their money where their mouth is um show users that people don't just like your product but they're committing they're willing to use it early adopters um even even if a user a small user base commits it indicates that you're tapping into a general pain point just something to be aware of make sure it's not your friends invest a team confidence you know if you're um looking to raise money if you already have a team depending on you know how you're capitalized then having these early commitments is this early sort of willingness to commit by customers and measured by revenue or or Lois then um you know that's going to give everyone confidence proof types then um so pre-orders or deposits Lois letters of intent uh beta weight list signups with genuine genuine interest um and of course like money right but that's kind of covered under um pre-orders so jumping into the activities um for gate three then so hacking together an MLP of course it's going to be very situational dependent um so more like guide and principles here um so you can quickly assemble this either you know using AI tools various AI tools out in the Market at the moment offshore Talent or even no code platforms uh that are going to help you validate your customer interests um really want to avoid sinking you know a lot of money um at this stage building software can easily become one of the most expensive mistakes uh you can make it can financially wreck you if you don't do it correctly so just really try to validate your assumptions before going big um so why this matters you know MLP before going like fully flesh product allow you to move fast and iterate goes without saying cost efficiencies uh so minimize um your burn rate and then uh strategy over features right it it forces you to try validate that core functionality that core problem that core value proposition that core thing that your product needs to do rather than worrying about all the small stuff which I think people can um spend too much time on how to do it um again I don't want to get into this too much um but the way I like to do it is develop a PRD which is a product requirement doc um which just outlines the core user user flows the features um the personas the uh user stories that kind of stuff um I'm not technical I'm not an engineer um I can sort of get to a level with uh current AI tools but they can only get you so far once the codebase becomes quite big and complex especially in bet to be um you you do need that someone with engineering skills at some point um so this is just an example I created um and then yeah use AI tools offshore Talent um so AI tools like chat gbt um cursor uh can generate boiler plate code vo and loveable for the front end um I prefer loveable pretty much what exclusively Ed for prototypes and then offshore Talent platforms like upwork top tool lemon online jobs um can help you find great great engineers at um and a reasonable price and then don't be afraid of manual work right if um it's going to take too long to build something then um you know do it manually in like a coner style um you know something I've seen people do is they have more of like an agency model so they like deliver a service and they eventually figure out a way to um automate that uh through their product um I can do more on this uh if you guys think it' be useful for a separate video and then run a close beta this is something I'm you you know um I think is really important and a mistake that Founders make uh so why run a Clos beta right so um control so it allows you to choose who gets access to your product and so this ensures your on boarding the right customers rather than dealing with a random mix of customers and uh bad fit customers that um inevitably cause a lot of headache and and wasted time um it also means you can manage the market perception more carefully um because your product's going to be Scrappy it's probably not going to be great and so it allows you to have more control over that process um because you know if negative word of mouth gets out it could be quite damaging um allows you to manage uh your feedback loops so smaller hand selected group of people it simplifies feedback Gathering all the all of the design partners for my startup I have them on slack in a one-onone channel we communicate regularly we have regular check-ins um and there's this understanding that they get access in return for feedback um and you'll catch deal breaker issues faster without juggling a flood of random user demands right um so really good for like the the feedback uh you're getting excitement scarcity you know closed beta can create um a sense of exclusivity which some people um you know are attracted by and then how to acquire these beta customers um so social content you know progress updates product teasers behind the scenes um even just hey I'm working on this problem if you'd like to learn more reach out uh outbound DMS you know approaching this is probably where most people are going to sit um you know I have like a a link a daily non-negotiable list for LinkedIn where it's like 20 connection requests 10 20 DMS uh out to people every single day and you you'll you'll just you know get conversation through that if you do enough volume and then um existing pipelines you know if you've spoken with somebody a few months ago and you've made significant process or you know you're now at a time where you can have close beta reach back out to them um and tell them you know give them an update and get them Insight of the product this is like a visualization of what your funnel looks like at this stage so you have traffic pushing them to a wait list um you then you can either on a thank you page when somebody opts into the weight list uh get you know send them to a candly page where they can book a call or you can send emails to the weight list and get them to a book a call that way and then when you're on the call people either become a design partner I.E they help you build the product and there's this Mutual understanding that they have um you know either free or discounted access to your product in return for giving feedback or they can become an influencer maybe they've got a bit of an audience online and they're interested in what you're building they think it's cool um and maybe they can support with your launch and ongo marketing right so trying to get the most out of every conversation you're having I'm not going to go into these for this um so treat beta customers as high touch high value right I think um again this is maybe just like a jaded view that um content has created for people is where people are like oh this person's only paying me x amount of dollars like it's a waste of my time and they don't deserve my time like when you're pre-product Market fit you should be treating every single customer like their uh you know gold dust because they are they're superheroes right they're people who have made a bet on your company when you know they could easily go to a more mature company that probably solves their problem better and so you should be treating them um as as with high touch and and as if they're high value because they are right so these early evangelists are superheroes right they're giving you uh your company a chance right so some guiding principles here onboard them properly so don't just send them a link and say hey go sign up to the product you know schedule a kickoff call an onboarding call guide them through the core flow maybe even do a reverse demo where you get them to share their screen and then they sign up to your product themselves and they use your product themselves and so they're doing it themselves and that kind of gets them across that cuz you've probably had it all happen where you have a call hey you can sign up via this link and a percentage of people never sign up if you're doing a reverse demo they're signing up on the call and so it solves that communication C uh Cadence set up a regular checking right to see how they're doing have this on the calendar as a recurring invite otherwise it won't happen close feedback loop I like to get people into a dedicated Channel and slack um you tackle that however you want to but ensure there's a regular Cadence of feedback um and you know just going above and beyond to ensure they're using the product if it means you having to use the product on their behalf and um you know be in Hands-On then do so and then figure out how you don't have to do that in the future right you just need to be um really in the weeds with your customers at this stage okay that's all good so how to verify you solved this gate then um you can show literal proof like we have we have this amount of revenue from these customers or we have like a letter of intent from these companies right it's very black and white there there's no way to wiggle your way out of this you've either got um proof of demand um or or you don't right you either have built an MLP or you um don't if you can't get people to commit real dollars at this stage you know you should not be thinking about doing like a big launch you should not think about running a free trial right for all of the reasons um I explained so exit criteria for the entire stage one right so this is verification just for this milestone for the entire stage one which is problem solution fit you have validated the problem you've formed a wedge and you've possibly collected one to two paying or strongly committed customers even if revenue is small you're ready to shift to the next stage once you confirm that customers are actively using or seeing the potential of your Solution that's another thing um which we cover more so in stage two is paying you is one thing right but you actually want people to use the product you actually want people to keep using the product because that's how you know you have a good product right you you don't want people ghost customers who are paying you $ x a month and just never use a product because that just simply means you haven't built something valuable enough right and that's also going to come with its own issues so summary of activities in stage one develop a market hypothesis and problem statement via structured interviews develop and refine your wedge via structured interviews and commitments build a minimal lovable product and get early commitments or first paying customers run a closed beta program with a tight feedback loop and validate the wedge Works I.E does it actually deliver an impact to the customer right people can say yes I'm interested I cool but does it actually do the thing um that you promised so what you probably shouldn't be doing if you're at this stage spending tens of thousands of dollars on uh development prematurely launching a self- serve motion delegating marketing ourselves to someone else Building without stress testing their assumptions prematurely trying to gain leverage through automation you know you need to stay close to ground zero and investing in long-term plays such as SEO influencer marketing or brand marketing right you need to be focused on um short-term plays getting customers validating your your assumptions because you can invest a lot of time and effort in these things and then you know you have to Pivot or your assumptions were wrong final thoughts then and so I call this phase of a startup the eat phase because that's exactly how it feels and so don't worry about this it's normal every day as a Founder it feels like the world is burning around you this is normal you just need to stick with it um you know just increase your probability of success by ruthlessly stress testing your assumptions and by having a pan um our special it at grass is helping you navigate this phase and reach your first $1 million in AR feel free feel free to book a call at grass.com if that sounds good again I showed some evidence at the beginning here's some more evidence um if you go to our website you'll see even more evidence and learn it a bit more about our process so thanks for um giving me your time and I'll see you on the next one