Pinning down the main idea of a business and determining your startup’s core value proposition is a difficult task, especially for first time founders. It’s even harder when you are innovating in a uncharted waters, with lots of intangibles and no clear leader.   As entrepreneurs we tend to focus too inwardly and only see problems or possible solutions from our point of view.  Most of the time this does’t connect with others.

Yet taking the early steps to correctly position your company in the general public is one of the most important tasks on a founder’s to do list.  So how the hell do you know if you are even heading in the right direction?

Thankfully, there are some specific ways you can gauge your value proposition and see how it is fitting with your target market.  Listening to people when you pitch and observing how it’s coming across can lead to deeper understanding of your business.

Here are 3 clear signs you and your product are heading in the right direction.

Listen: People Are Demanding Your Solution

I recently attended StartupDay here in Seattle and had an experienced I will never forget.  A very well known CEO of a well-known company started his talk by noting great entrepreneurs first look for problems in their own lives, and then determine how best to solve them.  Next, he proceeded to list off some problems he sees in his life, and pretty much pitched our idea to the audience.  He quickly described the problem Order SM is attacking and demanded a solution. He said “interacting with local merchants and restaurants is such an inconvenience… will someone please give me a system where I can order food, like a burrito, without having to call the business. I just want to text the order to them, pay for it and just swing by to grab it. Someone please build it, cause I would use it!”

BAM!  He just nailed one of the main value propositions of Order SM, and we are rolling out with our beta test customers this week!

When I heard this and about fell out of my chair, since this speaker is well respected and anything they would request falls into the “good idea” category.   Talk about validation.

Do you hear people causally talking about the problem you are trying to solve?  And are they vehemently asking for your solution?  Hmm, better listen up!

Lesson: You know you are heading in the right direction when well-respected people are publicly demanding your solution in their lives.

Watch: People Get Excited When You Pitch

Each day when I am asked “what I am working on” or when I talk about Order SM, I proceed through my basic pitch. Every time, without fail, people react the same way. “duuuuude, I need that! I would use that all the time! This is a great idea…. When can I start using it.”  

When you pitch your idea, do people respond with that much excitement and energy?  If not, I hate to tell you but your idea is not good enough.  It just isn’t.  If people are not moved by the value proposition your concept holds, the fact is not enough people will use your service or technology for it to gain any attention.

It’s a tough pill to swallow, I should know.  My first attempt at a startup, Loyaltize, did not have a strong enough value proposition for people to jump at it. They usually would respond with “so, let me get this straight…. you guys are like…. and you are doing X and Y, right? Hmm, that’s interesting?” I hated the fact that I had to describe what we were doing like 3 times before they really got anything from my pitch.

Lesson: If people don’t jump out of their skin when you pitch your startup, do yourself a favor and go back to the drawing board to either re-word around a different problem or find a completely different idea.

Embrace: More And More Competitors

Competition is a good thing.  I get the feeling most founders are deathly afraid of any company, large or small, entering into their market with a similar value proposition.  Unfortunately that is a sign of weakness and lack of confidence in your own business.  I say: Awesome!  This validates, measures as well as directs my overall strategic alignment.  Bring it.

It seems like every day we are discovering new attempts around mobile ordering/payments/messaging for local consumers. Some seem to be going in a similar direction as Order SM; many are not. This is fine in our opinion. The market is so young and fragmented; it still has a long way to go in terms of maturity before one platform emerges as the definite market leader.

But one thing is for sure – it’s validated as an incredibly big market, a trillion dollar market in fact.  Anytime a market see’s increased attention and activity, big things are about to happen.  Mobile payments, mobile communications, mobile ordering, social commerce, local CRM – all these markets are getting red hot and are experiencing abnormal attention lately.  It will now come down to who can execute with the optimal technology, team on an appropriate time line.

If you are not seeing more entrants into your territory you should probably do some evaluation. The market might not be very promising or it’s too mature for any new players.  Identify this early enough and you might be able to make adjustments before it’s too late.

Lesson: If you are seeing growing action and innovation within your specific market, you are indeed heading in the right direction.

@jnickhughes