Facebook's competitor wasn't just Myspace or Friendster; it was Yahoo Groups, AIM, IRC.
iPhone's competitors were Symbian, Java ME, whatever Microsoft planned for mobile.
Netflix's competitor was The Pirate Bay.
The competitor of some fancy Italian restaurant isn't some cheap Italian restaurant. It's fancy steakhouses, fancy Japanese restaurants, or theatres - the real value proposition is that it's a way to spend money on a good night.
It's a skill to find it, but it's also good homework - then you really know what people need and how to pitch it.
In your specific case, I would talk to your potential users and see if they bring location part as a problem (but dont ask them directly if that is a problem, ask them what their biggest problem is) Speak to at least 10 people and see what you learn.
Also a great and very straightforward (also short) book on the topic: Talking to humans
In your situation, the first thing I would suggest to you is, figure out what you want to do, because you can't have two goals. You can have a primary and secondary goal, but, admittedly I could well be projecting and assuming like crazy, but your words were read by me like you don't know which is more important to you. The title of your post also played a part in my assumption.
If you are building for learning purposes, then that is your primary goal, and focus on learning. If you want to see if people want what you are building, then I'll ask, why take the long way round?
Build what they want, instead of building and seeing if they want it. However I do have some issues when it comes to building what people want, not least, want? People want all sorts of things, some based in reality, some who knows where. So, I'll say build something people need.
When it comes to assessing what they need, your options are:
1. Ask them, doesn't always work, especially if you are asking the wrong people, by wrong I mean, asking the general market within your niche. Even if you ask clearly defined early adopters, who are problem and solution aware, have the risk appetite, have the other dispositions often noted within this segment, there can still be issues.
Now not for a second am I saying don't ask them, what I am saying is certainly ask them, but pinch of salt as well, because problem and solution aware doesn't necessarily mean they have taken into account various contributing factors and root causes, and to cut this line short, they don't know what they don't know.
They are living with the problem as they live a life, which means they are not sat there thinking about the problem at the required contextual nor granular level that you, as the producer of a solution has to think about it. To them it's a roadblock, a hindrance and one way or another they need to get past it. Granted some early adopters, will concoct their own solution in this case.
There are a multitude of other issues when it comes to asking them, which if you want me to elaborate on, I will do, but for now, will cut it short.
2. Ask others in the space: What I have found very helpful indeed is to ask those who came before, ie failed founders in that space, other people who are attempting to address the problem in a different way, or attempting to foster a community from which a solution or a number of solutions will emerge. These people, absolute wealth of knowledge. But even then, the solution is on your head, not theirs, for there is a certain amount of conditioning that these people have based on obviously their own experiences, and again certain blind-spots.
3. Observe. Better than asking, you are seeing things for yourself, but you can only see so much, and may well fall into the same trap in that you to things at face value, can't see the tree for the forest, lack of perspective, or at the most one perspective, yours.
4. Work with them, as in don't ask them, but experience it for yourself. This way, you are not relying on them, because they will filter things out, they will have blind spots, they will colour things. But again, issues, face value, etc, etc. And you may well see something that was not seen before. I do think this is vitally important, because reality is a teacher that doesn't pull it's punches. If pleasure and dewdrops don't work, pain and fire can be equally effective teachers.
5. Research, read: there are some people who treat knowledge as it should be treated, to be shared freely, much respect. This way, you (hopefully) gain the knowledge and insight of many, but book smart doesn't mean street smart. And book smart doesn't mean things become intrinsic and inherent within your being. Just because someone can parrot the wise words of another doesn't mean there is innate understanding of what they are saying.
6. Think: I know this might sound a bit silly, but spend sometime thinking about specific things, from many angles, macro-micro, etc. Now I am not saying get your paralysis on, but getting proper thinking time is important. Question yourself, make it uncomfortable.
7. All of the above. Still no guarantees, but that's life. Faith flourishes in ignorance's shadow, so you walk with belief until you can replace belief with knowledge. Some founders have these grand visions of the future. Visions are important, for we are not robots, devoid of inspiration, ambition, nor desire. But you have to earn the right to create (or co-create) that future, in the reality of the present.
By this I mean, until it is actually used by someone and helps them to get past the roadblock and onto the goal (or end-goal), it's belief to whatever extent. So, you do some of the stuff mentioned, then seek to replace what you believe with what you need to know. How you test that, can be any number of ways.
I will refrain from sharing my views on MVP, but I will say this. Don't get fixated on product. It's just a conduit from where your audience is to where they want to be. Test the conduit, the before and after, and what happens within it.
Cheers, Ace.
