Scalable Revenue Generating Solutions: How to identify a customer need that can be solved and scaled - Part 2 of 2
In this second part, learn to pinpoint the right market and sub-market, set pricing that reflects value, and differentiate your product for impact i.e. scaling revenues and customer success.
In Part 1, I covered the foundation of building scalable solutions: i.e. figuring out if you’re solving a real problem. We covered the following topics:
1/ What happens when you build for a need that doesn’t exist (spoiler: wasted time and money).
2/ How to spot a real need using proven frameworks.
3/ Steps to validate a problem statement so you know it’s urgent and worth solving.
Here is a link of the first newsletter of this 2 part series (if you have missed)...
Now you know the process to identify a real need and validate a problem statement.
Great! But that was just the first half…
To build something truly scalable, you need to go deeper. You need to understand who will buy your solution, how much they’ll pay, and why they’ll stick around.
It’s not just about solving a problem—it’s about making sure your product stands out, feels risk-free, and becomes something people can’t live without.
In this second part, we’re diving into the next steps:
1/ How to find the right market and sub-market.
2/ How to nail pricing that reflects real value.
3/ How to differentiate your product and make it sticky.
4/ Frameworks to build a solution that can scale effortlessly.
This is where things get tactical. No fluff, no jargon—just clear, actionable steps to take your idea from a validated need to thriving, scalable business.
Ready to build smarter? Let’s dive in.
Validating a Market and Sub-Market: The Playbook for Finding Buyers Who Feel the Pain
Validating a market means finding those who are ready to talk, cry, share and pay.
Here’s how to figure out if your market is ready for your solution.
Step 1: Market Heat Mapping
You need to measure how “hot” your market is. Who’s feeling the pain, and how badly?
What to Do:
Look for high pain and purchase intent.
Tools to explore:
Forums like Reddit, Quora, WhatsApp Groups.
Surveys targeting your audience.
Search trends using Google Trends or Ahrefs.
Example:
If you’re selling B2B cost-saving software:
- Heat : Companies with declining revenue (because saving money is critical).
- Proof : CFOs on LinkedIn posting about budget cuts.
Don’t just find pain. Find urgency.
Step 2: Behavioral Validation
If 50%+ of your target audience isn't feeling heavy pain, the solution is not scalable.
How to Validate:
Look for behavioral signals:
Are they already trying to solve the problem with make-shift solutions?
Are they Googling alternatives? (Look for Search volume)
Are they complaining in online forums?
Example:
- B2C: You’re building a fitness app for busy parents.
- Validation: 60% of survey respondents say they skip workouts because they lack time and structure.
- Proof: They’re asking in Facebook groups for quick routines.
Don’t mistake big posts for a trend. Focus on patterns from the posts of multiple folks.
Step 3: Use Focus Group Interviews to Listen and Learn
Sometimes, you need face-to-face (or Online Zoom, Gmeet Meeting) time to get the real story.
How to Run Focus Group Interviews:
Gather 6–10 people who fit your ideal customer profile (ICP).
Show them your idea or prototype.
Ask:
“Would you pay for this? Why or why not?”
“How does this compare to what you’re using now?”
What You’re Looking For:
Emotional reactions: Do they get excited?
Skepticism: Are they identifying holes in your idea? That’s the feedback you need.
Example:
You present a budgeting app for freelancers.
Feedback: “If this saves me 3 hours a week, I’ll pay $20/month.”
Step 4: Track KPIs (The Numbers That Matter)
Your market validation efforts should lead to clear data points.
KPIs to Measure:
1. Engagement Rates
% of survey respondents or focus group participants showing interest.
Aim for 50%+ saying it’s a top 3 problem.
2. Early Adopters
Number of people willing to beta test your solution.
Look for 10–20 early adopters ready to sign up.
3. Search Trends
Is search volume increasing for keywords related to your solution?
Example:
You run a survey for your cost savings B2B software.
- 75% say cost-cutting tools are critical this quarter.
- 15 companies sign up for your beta.
That’s validation.
Step 5: Avoid These Common Pitfalls
What to Avoid:
Too Small a Niche:
A niche of 50 people won’t scale.
Focus on markets with at least 1,000 active potential buyers.
Overgeneralizing Segments:
Don’t assume all SMBs have the same problems.
Fix: Get specific. “SMBs in retail” is better than just “SMBs.”
Ignoring Buying Power:
If your audience doesn’t have the budget, you’re stuck.
Fix: Validate willingness to pay.
The best markets aren’t just ready—they’re already sharing their pains. Your job is to find those who are desperately looking for solutions.
Talk to users. Measure their actions.
How to Validate Pricing That Reflects Value
I have already written another newsletter on “Pricing Strategies: What's free to decide”. Link here..
Decidiy Pricing is tricky..
Too high, and your buyers will start avoiding you.
Too low, and you leave money on the table.
Here’s how to do it.
Step 1: Start with Value-Based Pricing
Your price should match the problem you’re solving. If the pain is deep, the price can be charged higher
How to Find the Right Value:
Ask directly: “How much would you pay to fix this?”
Experiment with price anchors:
Start with a premium price, then offer tiers.
Example: Gold, Silver, Bronze packages.
Example (B2B):
You’re selling productivity software. A manager says:
“If this saves my team 10 hours a week, I’d pay $200/month.”
That’s your baseline.
Example (B2C):
You’re launching a meal prep service. Ask busy parents:
“How much is your time worth?”
They say $50/week. Your pricing should be on the same lines.
Always tie the price to the value delivered. If you can say, “This saves you $500; it costs $50,” you just captured them.
Step 2: Use a Price Sensitivity Meter
This is used for identifying price tolerance.
How It Works:
1. Survey your target audience with these four questions:
- At what price does this feel too cheap?
- At what price does this feel like a bargain?
- At what price does this feel expensive but worth it?
- At what price does this feel too expensive?
2. Find the range where most users feel comfortable.
Example:
For a B2C fitness app:
- $5/month feels too cheap (users think it’s low-quality).
- $10/month feels like a good deal.
- $20/month feels premium but still worth it.
- $50/month feels like too pricey
Your sweet spot? $10–$20/month.
Step 3: Test Pricing in the Real World
The only true way to validate pricing is to ask people to pay.
How to Test:
Offer a paid pilot or subscription at different price points.
Measure who converts and how sticky they are.
Example (B2B):
Offer your software to five companies at $500/month.
- If three sign up and stay engaged, your price works.
- If they churn, you might need to revisit ROI.
Example (B2C):
Launch your fitness app at $9.99/month.
- Track signups, cancellations, and customer feedback.
- Did users say, “That’s a steal” or “Too expensive for what I got?”
Step 4: Track the Right KPIs
Pricing isn’t just about revenue. It’s about long-term value.
KPIs to Monitor:
1. Conversion Rates:
What % of buyers convert at each price tier?
Aim for steady growth without steep drop-offs.
2. Customer Lifetime Value (CLTV):
Are users sticking around long enough to justify acquisition costs?
3. Price Elasticity:
How sensitive are customers to price changes?
If Customer LTV is low, you may need to adjust pricing—or improve the product’s perceived value.
Step 5: Avoid Common Pricing Pitfalls
Here’s where pricing experiments go sideways.
Pitfalls to Watch For:
1. Overpricing Before Proving ROI:
Charging $500/month without showing results is a disaster.
Fix: Start with pilots that build trust.
2. Undervaluing Premium Offerings:
Pricing too low is a sign of low quality.
Fix: Always frame pricing against the value delivered.
3. Ignoring Competitors:
If your competitors charge $20, and you charge $50, you’d better justify the difference.
Pricing is an art and a science. Tie it to the value you create, test it in the real world, and never be afraid to adjust.
The right price isn’t just a number—it’s a statement of how much your product is worth.
So, ask the hard questions. Test, tweak, and listen.
Steps to Make Your Product Differentiated, Risk-Free, Affordable, and Sticky
Buyers need to feel your product is unique, risk-free, and worth every penny.
Here’s how to make that happen.
Step 1: Nail Your Positioning
A clear and bold positioning statement sets you apart.
“Here’s why we’re different, and here’s why you need us.”
What to Do:
Draft a Unique Selling Proposition (USP).
Be specific, not generic.
Example: “The only budgeting app designed for freelancers struggling with unpredictable income.”
Don’t compete on features—compete on outcomes.
- Instead of: “We have 10 integrations.”
- Say: “Save 10 hours a week with seamless integration.”
Step 2: Simulate the Customer Journey
Is your product solving pain without adding new headaches?
How to Test:
Ask real users:
“Does this reduce your risk or complexity?”
“Is this better than your current solution?”
Walk through the buying process yourself.
Are there confusing steps? Hidden costs?
Example:
A CRM promises simplicity but takes weeks to set up. That’s a red flag. Buyers want effortless onboarding.
Fix It:
- Offer tutorials, demos, or white-glove onboarding.
- Make it feel like their life is instantly easier.
Step 3: Make It Sticky
Sticky products are the ones people use daily, without even thinking.
How to Measure Stickiness:
- Use the DAU/MAU Ratio:
- Divide daily active users (DAU) by monthly active users (MAU).
- Aim for 50%+. That means people keep coming back.
Ways to Build Stickiness:
1. Gamify Engagement:
- Example: A fitness app rewards users for completing daily workouts.
2. Integrate with Their Workflow:
- Example: Slack connects with tools like Google Drive to make switching impossible.
3. Add Personalization:
- Example: Spotify recommends playlists tailored to your mood.
Red Flag to Avoid:
If users churn after 30 days, the product isn’t sticky enough. Dive into feedback to uncover why.
Step 4: Track KPIs That Matter
Use metrics to measure differentiation, risk reduction, and stickiness.
KPIs to Watch:
1. Net Promoter Score (NPS):
- Ask: “How likely are you to recommend this?”
- High NPS = users love and trust you.
2. Time-to-Value (TTV):
- How quickly do users see results?
- Faster = better. Example: Canva shows value on day one.
Step 5: Avoid These Pitfalls
1. Positioning Too Broadly
- “We’re for everyone” dilutes your value.
- Fix: Focus on a niche and own it. “Built for small law firms” > “Built for businesses.”
2. Lack of Proof Points
- Promises without proof create hesitation.
- Fix: Use testimonials, case studies, or data to back claims.
- Example: “Saved 500 hours for 50+ teams.”
3. Overcomplicating Pricing or Setup
- Buyers hate friction.
- Fix: Simplify. Offer risk-free trials or guarantees like: “Cancel anytime.”
When buyers see your product as the easy, safe, and smart choice, they’ll say yes.
Be bold in your positioning. Test your product as if you’re the customer. And focus on making your solution irresistible—something they want to use, not just need.
The goal isn’t just to sell. It’s to stick.
Thinking Frameworks and Structured Processes for Building a Scalable Solution
Building a scalable solution is about tearing assumptions apart, testing fast, and creating a space where competitors can’t touch you.
Let’s dive into three frameworks that will take you there: First Principles Thinking, Lean Startup, and Blue Ocean Strategy.
1. First Principles Thinking: Break It Down to Build It Up
This framework forces you to question everything. Stop assuming. Start deconstructing.
How It Works:
- Break down your problem into its most basic truths.
- Rebuild your solution from the ground up.
Example:
You think you need a fancy website to launch a new product.
- First Principle: You don’t need a website to validate demand.
- Solution: Launch with a simple landing page and a sign-up form.
How to Use It:
Ask: “Why does this work the way it does?”
Question every step: Is this essential or just tradition?
Rebuild with only what’s critical.
Elon Musk didn’t just build rockets—he asked, “What are rockets made of, and how can we make them cheaper?”
2. Lean Startup: Learn Fast, Fail Faster
Why build something for a year and find out that no one wants it?
The Lean Startup approach says: Build small, test early, and learn quickly.
How It Works:
- Follow the Build-Measure-Learn Cycle:
- Build: Create a prototype or MVP (minimum viable product).
- Measure: Gather real feedback from users.
- Learn: Use that feedback to improve. Repeat.
Example:
You’re building a B2C fitness app. Instead of coding for months, you:
1. Create a simple spreadsheet workout plan.
2. Share it with 10 people.
3. Ask: “Did this help you stick to your fitness goals?”
Why It Works:
- You save time and money by focusing only on what users actually need.
- You build confidence in your solution through real-world feedback.
Every “no” gets you closer to a “yes.”
3. Blue Ocean Strategy: Swim Where No One Else Dares
Blue Ocean Strategy helps you create uncontested space where competition is irrelevant.
How It Works:
- Identify what your market hates about current options.
- Create a solution that eliminates frustration and adds delight.
Example:
Uber didn’t compete with taxis—they reinvented the experience.
- Frustration: Hard-to-find cabs, inconsistent pricing.
- Delight: On-demand rides, transparent pricing, and cashless payments.
How to Use It:
1. Map your competitors’ strengths and weaknesses.
2. Ask: “What can we eliminate, reduce, raise, or create?”
3. Build something so different, customers can’t compare it.
You don’t have to invent a new industry. Just rethink an old one.
4. Processes: Turn Ideas into Scalable Solutions
Step-by-Step Process:
Problem Discovery:
Talk to users. Identify pain points that are urgent and frequent.
Prototype:
Build something small—landing pages, mockups, or even a service-based test.
MVP:
Create a minimal version of your product. Focus on delivering core value.
Feedback Loops:
Iterate based on real user data. What do they love? What’s missing?
Scale:
Once your MVP resonates, build for scalability—better tech, wider distribution.
Scaling too early is a trap. If your MVP isn’t solid, more users = more problems.
5. KPIs: Measure What Matters
Tracking the right numbers keeps you on the path to growth.
What to Measure:
- Speed of Iteration:
- How quickly can you test and improve?
- Cost of Customer Acquisition (CAC):
- How much does it cost to get a paying user?
- Customer Lifetime Value (CLTV):
- Are users sticking around and paying over time?
Example:
If CLTV is 3x your CAC, you’re in good shape. If not? Revisit your pricing or retention strategies.
Whether you’re using First Principles to rethink the basics, Lean Startup to iterate faster, or Blue Ocean to chart new waters, the goal is the same: build something people can’t stop talking about.
Test. Learn. Adapt.
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Great article. Love the point on Behavioral Validation.