After a long long hiatus (ie been far to busy working finishing a startup) I decided to write a post. My own blog is still lacking in posts due to work, but will get back to that this week.
Anyhow have been thinking about this for some time. I have looked back at several startups, we all know of Google, Yahoo, Indiatimes, Facebook etc etc, but I am wondering all these which got funding, did they really solve a problem, I mean isn’t that what all VC’s really want, or maybe they did and it was just me that didn’t have that problem in the first place.
Lets look at Google, everyone says it solved the problem of being a better search engine, or rather it was a better search engine than those that were around during those days (I was a fan of Lycos). But how did we know we needed better search, I mean you can only tell you need better search if you know what else is out there, and I for one dont recall comparing search results everytime between google and lycos to see which was better. Hence was google a success because of search or simply because of speed. Lycos was full of ads, we all had 28.8K modems or some of us have the V90, K56Flex modems, but speeds were still slow, when google came along it just returned the results quicker…not sure if they were better.
Now lets look at Facebook, If I was do come to a VC with cap in hand and say “Please sir can I have some more…funding that is” and my idea was to build facebook. I am unsure as to what problem I would actually be solving, is it to get people to communicate, or to waste time at work, or to connect. I am talking about seed stage funding here, not the 3rd rounds where VC’s just follow others. What problem did/does Facebook solve.
What did Skype actually do that Yahoo Voice chat could not (agree quality at that point was better), but did it solve a problem that people just needed to solve.
What about twitter, did we really have a problem with telling the world when we get up out of bed 🙂
Did we really need a Zimbra, didn’t email just work before.
Did these companies and other really successful ones solve a problem, or are they just things that we use because out friends use them, and so we must also, and if that is the case, how would you ask a VC for money for something like that 🙂
Iqbal
P.S Next post – How does a company like minglebox ask for $ 8 million …and what does it spend it on
- Building a startup in 30 mins (well 41ish) – Iqbal Gandham - December 3, 2009
- Should Facebook and Twitter bother to make money? (Iqbal Gandham) - February 17, 2009
- How we got Nivio to Davos (WEF)…and won - February 5, 2009
Some more questions with more food for thought:
1. Ford was started in 1903 with $28,000. What problems it solved then? Were the “commuting” needs really pressing? And then why did we have General Motors 10 years later. Same goes to Hindustan Motors vs. Maruti Udyog vs. Tata Nano.
2. McDonald’s started in 1940 and then came Burger King ten years later follwed by In-N-Out, Carls Jr, Jack in the Box. What problems McDonalds solved when it started and why Burger King, In-N-Out, etc. are still very large with their own USPs.
Indus
… Continue this conversation live on twitter with 1ndus
Thats really a gud post as it brings so many diff perspective to the main idea. Though, not a psychologist I would like to bring out some points:
Yes, coolness factor is one the many things which attracts ppl towards a product, “The Tipping point” very well explains tht effect.
But “not solving a problem”, is a point I’d like to disagree with. There are two kind of problems- hard nd soft (my own definitions though… :)..), problems which we see and talk about(money, business, terrorism, etc etc) and problems which are inside our mind but we dont talk about. Internet has the capability to solve ths kind of problems..coz its something with which v cn talk one-to-one. Who thought that Orkut/Facebook can actually help bringing friends closer, can help them in knowing about each other after jst 1 meeting.. no one!
Similarly every person in this world has atleast 2-3 mates fr whom they’d like to knw everything, whr r they, wht r they doing etc etc. Skype does exactly tht.. Its not a problem which we can see.. but its hidden..
And yes, gud internet business always build up with a bit of intuition… tht intuition helps us in understanding these soft problems of ppl!
Iqbal,
Thanks for bringing it up… A nice subject to inquire after long…
Sanjay has some brilliant insights while he says great enterprises need not come up necessarily resolve problems… They can bring up something new and get people sticky. Success depends on how it finds the perfect hipsters to infect, triggers a trend, back it up by ease of adoption and rattle up the place. In essence, enterprise innovation need not be incremental or resolutionary, it can be refreshingly novel and pathbreaking.
Timing is also important. When I say timing, I expect conditions should be ripe for the trend to catch on. Trends are more like forest fires: There are thousands a year, but only a few become roaring monsters. That’s because in those rare situations, the landscape was ripe: sparse rain, dry woods, badly equipped fire departments. If these conditions exist, any old match will do. But nobody will go around talking about the exceptional properties of the spark that started the fire.
I have heard this often enough, and never agreed to it. That great businesses or business ideas have all to be about ‘solving a problem’. Its good if a business can solve a problem, but those are certainly not the only successful businesses.
A business could just as easily provide more fun to people (the bowling alley was not a problem that got solved – it was not that people did not have entertainment, but it was another form and a fun one too), could enable people to make more money (“more” money is not a problem of poverty being solved, but its a welcome idea to most, I would presume), could make life even more comfortable, etc. People managed without staying so close in touch (Facebook etc.) and did not even realize that not staying so close in contact with friends was a ‘problem’. But now many of us enjoy receiving the frequent status updates from our friends!
And so on..
I am not commenting on the VC-fundability of a business idea, and if indeed, VCs are obsessed about ‘solving problems’, then its a different issue. But a great business can be other than a problem solver!
Hi Iqbal,
A really pertinent post. I too agree that most times, startups dont really solve a problem but they create a want and then give a way to fulfil that want (MBAs would call it Need-Gap Analysis). In fact, I think most startups stem from an gap (I dont have numbers to support this) that entrepreneurs feel and after looking for options to fill that gap, they could not find a solution
Second, we dont use them because we see our friends use them but becuase they help us do a task better and faster.
Looking forward to your thoughts on MingleBox.
Regards,
SG