Startup founders can often find themselves working on an idea that sounds plausible, but does not provide a solution to a problem people care about in a meaningful way. Y Combinator founder and investor Paul Graham says that often, these startups are born from individuals who are simply “trying to think of startup ideas” and not looking for problems.
Graham calls these ideas “made-up” or “sitcom” startup ideas, as they sound like something a writer for a television sitcom would come up with when creating a script for a character that had a business idea. The idea seems possible, even though in reality it is bad and no one would use or buy it.
And often, these ideas begin with someone trying to solve an organic problem for his or herself.
Other examples include Craigslist and Netflix. Netflix founder Reed Hastings began his service in 1997 after paying a $40 late fee for renting Apollo 13. In Hastings’s mind, having to go to the store to rent and return movies, especially when late fees are involved, is a pain. The rest is history.
Getting Creative with Your Solution
So how can you make sure your startup solves a painful problem? Well, start with the problem. Problems are everywhere; it is just an exercise in noticing (as Paul Graham said) and questioning. What is currently nagging you? What do you do in your work that you think, “I wish I could ___ instead”?
Sadly, there is no easy formula. It is simply training your mind and your eye to pick up on problems that exist around you, question why those problems exist and for who, and then formulating a solution. If it was easy, everyone would be an entrepreneur (and then who would you hire?). By being curious and critical, you will begin to notice where readily available solutions do not exist for persistent problems.
Once you have identified a painful problem, 9 times out of 10 the solution will not be obvious or easy. Problems often necessitate creative solutions to make a business successful and enduring. Though this intuitively may sound difficult (because it is) it often creates a barrier of entry for competitors as well.
Let’s look back at the Dropbox example. During the service’s growth stage, they realized their customer acquisition was near $300/user.[1] That’s a problem. What did Dropbox do? They turned their user base itself into a sales force, offering 250 megabytes of storage space for a referral – a creative and innovative approach at the time.
One of the most creative startup stories comes from another Y Combinator company, Airbnb.
Airbnb
The short-term lodging service Airbnb was born out of roommates Brian Chesky and Joe Gebbia being unable to afford the rent for their San Francisco apartment, and offering floor space to individuals visiting a local conference who were unable to book hotel lodging.[5] The duo cleared their living room and served breakfast for their guests, eventually catering to more events before expanding the site, called at the time AirBedAndBreakfast.com.
Chesky and Gebbia’s problem was their inability to pay rent, and their creativity led to a massively successful startup that has since booked over 10 million night’s stays.[6] The pair’s creativity does not stop there, though.
During the 2008 United States presidential election, Chesky and Gebbia created and marketed “Obama O’s” and “Cap’n McCains” cereal. At $40 apiece, the team sold 800 boxes and made over $30,000 to help cover their startup costs.
Once the company was off the ground, they faced a similar user-acquisition problem to Dropbox. The startup created an automated program to email individuals posting vacation listings to Craigslist a link to Airbnb promoting the service.[8] The company has drawn some criticism and claims of spam, but it’s hard to argue with the results.
Unfortunately, finding a painful problem and coming up with a creative solution is not enough.
Once a problem has been identified, and a solution has been formulated, the entrepreneur must discern whether or not the solution is something the user who feels the problem will pay for. If people aren’t willing to pay for the solution, you still don’t have a business. The key for finding out if the solution is sellable is easy – talk to your users! Try to sell your solution before you even build it. In the next several chapters, we will discuss validation, traction, and selling respectively.
