'Am I solving a real problem?'
Too often people looking to start their own businesses measure themselves against a unicorn yardstick, contrasting their entrepreneurial ideas against the great technology companies of today, including Facebook and Google. Not only is the comparison unfair, but the thought process shuts down creativity and limits the scope of possible industries where entrepreneurs are likely to succeed and make a difference.
To build a sustainable startup that lives beyond today’s trends, entrepreneurs should strip ideas down to the basics. They should take away the technology and the flashy product features and ask: “Am I solving a real problem?”
At its core, a meaningful entrepreneurial idea is one that revolves around people. Once that’s established, everything else becomes simpler. Getting a clearer perspective of a problem can greatly shape how one begins to resolve an issue and build from it. Here are three useful perspectives that are worth considering:
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1. First-Hand Perspective
A common assumption that thwarts would-be entrepreneurs is the belief that a team of specialists is needed to get an idea off the ground. Although this can help down the line, what is needed at the start is valuable insight in the industry of choice. Does your insight come from personal experience in a particular market that no one else is in? If so, it’s unique. Zenefits, a 2013 startup that has a 2015 valuation of $4.5 billion, had its humble beginnings when its CEO—a cancer survivor adamant about healthcare—was fired from his previous finance startup. Interestingly enough, the startup was too small to hire a human-resources person to handle health insurance. Based on that first-hand experience, Zenefits came to fruition with the focus of helping small companies manage admin-intensive HR efforts that emphasized health-insurance coverage. Today, Zenefits has been identified as one of the fastest-growing software-as-a-service companies in history.
2. Second-Hand Perspective
A good entrepreneur might have solved her own problem, but a great entrepreneur will take a closer look at how the community is affected. In 2007, the creators of the popular live streaming platform Twitch had the idea that they would broadcast their lives to share online. The concept was a novelty, but they noticed people were asking how they could stream their own content. Although not considered a “real” problem by the general public, streaming was deemed a major obstacle in the gaming community. The fact that the creators had solved their own streaming issue meant that they now had valuable insight into a market where, today, streaming content is a rather common gaming behavior. Within a decade from initial insight, the company now has more than 1.7 million broadcasters, about 100 million visitors per month, and was acquired by Amazon for $970 million in 2014.
3. Outsider’s Perspective
Sometimes the best ideas arrive when they are viewed from a distance. A great example is the story of a man who left his well-paying job in the 1990s to build an online company after 1) hearing about the rapid growth of the Internet, and 2) the new Supreme Court ruling that dictated mail-order catalogs were not required to collect sales tax in states where they lack a physical presence. That man was Jeff Bezos, founder of Amazon, the largest Internet-based retailer in the U.S. Bezos didn’t come from a traditional tech background, but he was so intellectually curious that he had the foresight to build a solution before the problem. This isn’t always the case, but Bezos’ story illustrates that, regardless of where you started from, being well-informed can turn a person with limited industry knowledge into a formidable force in the future.
Entrepreneurs are often told to “live in the future,” and believe that everyone else will follow, but that’s not the typical startup behavior. Everyone can’t be Jeff Bezos, but everyone does have a startup within them based on a problem they’re experiencing. We just need to see those problems as insight and entrepreneurial opportunities for improvement.
Ask yourself: “Is this a space I need to be in?” Fortunately, there are several industries to choose from. Ten years ago, HR was a completely untouched market. Today, we’re in the midst of an HR startup boom. Similarly, the medial industry hasn’t drastically changed in 20 years, but in the last five years, a handful of entrepreneurs saw a problem in the way healthcare and patient records were being digitized, and now more startups are crowding the sector. And markets like fishing or elderly care aren’t necessarily considered trendy, but they’re examples of untapped markets worth exploring for someone with unique insight.
Always remember: Entrepreneurs are disrupters in traditional environments. A crowded startup market was once an unknown space until an entrepreneur with insight saw a problem worth solving. Next time someone asks you about your startup dreams, be sure you’re in a category worth making a difference in.
Hampus Jakobsson is the CEO of Brisk.