Most companies actually do burn through the cash trying to figure it out, and fail.
Early on, it's nothing more than an educated guess. Part of the problem here is that if you're actually creating something new, rather than a refinement of an existing product, you're in uncharted territory. Think of Henry Ford's comment about the customers wanting faster horses. That's not what they want. That's just the limits of their imaginations and experience. Great founders should be creating something the customers desperately want and need but couldn't even imagine or articulate. Henry Ford's customers just wanted to get from one place to another, faster than they could at the time, more reliably, and affordably. They wanted faster horses. He gave them mass-production cars that were affordable and easy to maintain.
Early on, it's nothing more than an educated guess. Part of the problem here is that if you're actually creating something new, rather than a refinement of an existing product, you're in uncharted territory. Think of Henry Ford's comment about the customers wanting faster horses. That's not what they want. That's just the limits of their imaginations and experience. Great founders should be creating something the customers desperately want and need but couldn't even imagine or articulate. Henry Ford's customers just wanted to get from one place to another, faster than they could at the time, more reliably, and affordably. They wanted faster horses. He gave them mass-production cars that were affordable and easy to maintain.