The document discusses five criteria ("5U's") that are good indicators of success for a startup business idea. The five criteria are whether the customer problem is: Untenable, Unavoidable, Unsolvable, Urgent, and Underserved. Startups should focus on solving customer pains rather than jobs or gains. Evaluating a business idea against these 5U criteria can help determine its potential, though low scores don't guarantee failure. The criteria don't provide a comprehensive evaluation on their own.

1. The Ideal Business Idea
The '5U' questions that startup founders should
answer before starting to build their product
Graham Horton
© Zephram GbR 2014

2. The Ideal Product
What is an ideal product (or service)?
 One with a maximal chance of success
Can we predict success for a business idea?
 No
But...
 We can name five criteria that are a good indicator.

3. Three Kinds of Customer Need
Jobs to be Done
 Everyday tasks that the customer must carry out
Gains
 Things the customer would like, but does not need
Pains
 Problems that the customer has

4. Three Kinds of Need: Examples
Jobs to be Done
 Accounting, cleaning, maintenance
Gains
 Office parties, entertainment, luxury goods
Pains
 Illness, lawsuits, sinking profits

5. Startups Should Solve Problems
Which category is best for a startup idea?
 Reducing pain
Why?
 Less competition
 Easier to get customer attention
 Easier to get a purchase decision
 Easier to charge a premium price

6. The Five 'U's
Five attributes of the ideal customer problem:
 Untenable
 Unavoidable
 Unsolvable
 Urgent
 Underserved

7. Untenable
What does it mean?
 Customers cannot afford to ignore the problem.
Consequence:
 The customer must obtain a solution.
Examples:
 Weak eyesight, declining sales in a core product

8. Unavoidable
What does it mean?
 The customer cannot sidestep the problem.
Consequence:
 The customer is forced to seek a solution.
Example:
 Contractual requirements

9. Unsolvable
What does it mean?
 Customers cannot solve the problem themselves.
Consequence:
 The customer must seek a third-party solution.
Examples:
 Lack of expertise, lack of a resource

10. Urgent
What does it mean?
 The customer needs a solution fast.
Consequence:
 The customer is motivated to act quickly.
Examples:
 Migraine, sudden drop in sales

11. Underserved
What does it mean?
 No (adequate) solution is available on the market.
Consequence:
 The first solution to appear will have a monopoly.
Examples:
 Cure for cancer, nuclear fusion energy generation

12. Evaluating the Idea
Problems seldom have all five attributes.
Therefore, treat each criterion as gradual.
 For example using a scale from 1 to 10
Determine your condition for attractiveness.
 Example: Idea scores at least 6 in all dimensions.

13. Evaluating the Idea
0
2
4
6
8
10
Underserved
Untenable
UnsolvableUnavoidable
Urgent

14. Low Scores
Does a low '5U' score imply future failure?
 No! (Facebook and Twitter would have scored low.)
It does mean that success may require…
 deep pockets
 extensive marketing
 difficulty finding product/market fit and a USP
 luck

15. Low Scores
Each low score indicates a potential difficulty:
 Not Underserved: Strong third-party competition
 Not Urgent: Hard to gain attention and interest.
 Not Untenable: Doing nothing is your competitor.
 Not Unsolvable: Your customer is your competitor.
 Not Unavoidable: Avoidance is your competitor.

16. Examples
Penicillin:
 Fulfilled all five criteria when introduced in the 1940s.
A divorce lawyer:
 Scores low in Underserved, otherwise highly.
A data recovery service for failed disk drives:
 Scores highly for Urgent, Unsolvable and Untenable.

17. A Common Error
The most common cause of startup failure:
 Building a product that nobody wants
The same is true for inventors
 Many patents are "solutions without problems".
 For example the dust cover for dogs.
 USPTO: Only 0.2% of patents have commercial value.

18. Caveat
The '5U' do not provide a comprehensive check.
There are other important criteria!
 For example: Market size, defensibility
However, a high score in the '5U'…
 does suggest a very valuable business idea.

19. Impulse für Innovation
Der deutschsprachige Blog für Ideen und Innovation
www.zephram.de/blog/
Ideenfindung
Weitere Themen in unserem Blog:
Ideenbewertung
Geschäftsmodellinnovation
Produktinnovation
Innovationsworkshops