I’m humbled that the University of Chicago (my MBA alma mater) asked me to do a brief write-up on entrepreneurship. What follows is directed towards the alumni of the University interested in becoming an entrepreneur. This will be written from the perspective of building a consumer internet startup (not a restaurant or other type of startup).
Don’t Be An Entrepreneur
I’m not one to be Debbie Downer and I think everyone should follow their dreams, as Mr. Jobs suggests, but I also believe in being realistic because what you read on TechCrunch and hear in the news about small companies getting funded with millions of dollars is a result of survivorship bias (thankfully, the Maroons know all about that :).
As such, I think any aspiring entrepreneur should watch this video by Dave McClure first (vid is about 25 minutes long and note that it uses some NSFW language, that’s just Dave’s style). Dave has been an entrepreneur for years and now runs the Angel investment firm, 500 Startups, where his goal is literally to invest in 500 startups. He tells it exactly as it is and what you should expect and do to be successful.
Why Not To Do a Startup - Dave McClure from Seattle20 on Vimeo.
Are You Sufficiently Motivated Now?
Okay, good you’re still here. So if you’re ready to take the plunge, you have to internalize one, EXTREMELY important thing, which Dave talks about in the video: The Problem. Until you find something that’s been not just bugging you, but annoying you to the point of anger, your idea probably isn’t good enough.
An Annoyance…Solved?
Here’s an example. Every morning I would wake up, have a million text messages, emails, voicemails, and tweets to get through while eating breakfast, showering, and getting out the door to work. The thing that always got lost in the shuffle was checking what the weather was like so I didn’t end up in the rain or wearing shorts when it was going to be 50 degrees that day.
It’s not a huge problem, but a minor annoyance, so we did something about it. We built an iPhone app called Weather Notifier that sends you a push notification for a time and location of your choosing. I set it up for 8am Chicago time and every morning I get notified of the forecast and chance of rain. In short, I “wake up to the weather” without having to ever open the app again.
We got some super fans and customers almost immediately because they had the same problem I experienced every morning, and the solution made it easy for them to minimize that pain/annoyance.
Obviously, with Apple’s new Notification Center in iOS 5 and Siri, it nearly makes Weather Notifier a buggy-whip business, but I’ll tell you one thing. I still get that alert every morning, and it saves me from remembering to check the weather (give me a break, unlocking my iPhone is haaaard!).
A Huge Market of People In Pain
Thus, your goal should be to find a problem so painful and so pervasive that once people hear about your product they flock to it like moths to a flame.
The beauty is you don’t even need to be that good at selling because the problem is so painful, your (even bad) solution stops customers from screaming.
Go Talk to People Already!
The question becomes, how do you find an idea worth solving? You need to talk to people. You don’t have to design anything, you don’t have to program anything, you don’t have to DO anything except chat with your friends, ask open ended questions, and listen, truly listen to what they say.
This week, I’ve been asking people what they use their iPhones for. The response? “Well, I check my Facebook, play some games on the train, and check my email”. The biggest problem of all? Boredom.
People, in the aggregate, want to be entertained and don’t want to have to think about it or do anything to get that entertainment. Trust me, I’ve fought it tooth and nail, but it’s time to stop fighting: The Real Housewives of New Jersey is entertaining because it’s a comedic train wreck, and it’s like eating desert with your eyes. You know it’s bad for you, but sometimes you just can’t help yourself.
Even Apple Focuses on the Problem
Have a look at the latest iPhone 4S commercial, showcasing Siri. Notice that the vast majority of the commercial is focused on the user and the user’s problems. And the most amazing part? It never once even mentions the name of the solution, Siri. They’re the largest company in the world, and they’re still acting like a startup. It’s probably how they got there in the first place. Kudos.
So What Do You Do?
Notice that I didn’t spend time talking about HR, legal, sales, marketing, or even operations. The reason is because none of it matters, at least not in terms of being successful, compared to the problem.
My advice to you is to talk to your kids, husband, wife, and best friends about what problems they face in their daily life (commuting, buying groceries, paying bills, etc) and figure out a way to solve that pain.
You probably won’t find a sexy answer, you probably won’t be building the next Facebook. But I will tell you one thing: you probably won’t fail.
