Does your product or service solve a problem? And is that problem worth solving?
Most successful startups are born from a need.
You need to ask yourself “Is my idea providing a solution to a problem worth solving?”.
It’s important to be honest with yourself. Otherwise you’ll end up wasting time, money and energy on an idea that had no chance of working from the get-go. No matter how seemingly-genius a spork is, the fact is that is solves a problem that no one really cares about. Do you know anyone who owns a spork? Neither do we.
The best way to come up with an idea is to notice - not think up - a problem that needs fixing, and find a solution to that problem.
If you’re simply trying to think of startup ideas, chances are you’ll end up with a bunch of ideas for products or services that, realistically, no one would use or buy (did we already mention sporks?).
How do you notice these problems? By trying to be more aware of the problems that you yourself face at work, at home, or anywhere else. That way you’re identifying genuine problems rather than trying to brainstorm a bunch of artificial issues that need fixing. You can also find problems that arise from specific situations, such as a crisis (COVID-19 naturally comes to mind).
Once you’ve noticed a problem that you think is worth solving, you need to come up with a solution that is both creative and functional enough to be worth buying/downloading. And that’s a lot easier said than done. So despite the fact that we can’t think of the solution for you, below are some case studies to take some lessons from.
Case Study
Webvan, the service ahead of its time
Valued at $1.2 BILLION at its peak in 1999, no one predicted that Webvan would file for bankruptcy just two years later. What was Webvan? A home-delivery service for your groceries, which is extremely prevalent these days with a number of major supermarkets offering that exact service.
So how did Webvan go wrong? They followed a business model that ultimately caused the company’s failure. This model placed emphasis on scaling as early as possible, but when Webvan expanded to 26 new cities, it caused a logistical nightmare resulting in losses of over $800 Million, the firing of 2000 employees and finally the closure of the business.
By scaling too early, Webvan didn’t wait to see whether they’d be successful in their original market (the Bay Area), where they were actually failing. But because they didn’t know this, they massively expanded and inevitably couldn’t cope with the sudden growth of the company, causing it to shut down.
Scaling too early wasn’t Webvan’s only flaw though. The company was providing a luxury service - WholeFoods-quality groceries delivered straight to your door. But because it was targeting an audience that was price-sensitive, Webvan had to price its service way too low, making it impossible to render the service profitable. Combined with the company’s complex infrastructure model and premature scaling, it’s easy to see how the venture ended up as a failure.
What Webvan did right:
Noticing a problem worth solving that affected a sizeable market.
What Webvan did wrong:
Expanding before evaluating performance in their original market.
Targeting the wrong audience.
Poor infrastructure organisation.
Airbnb, a success story
Airbnb got off to a rocky start, as do many startups, but it managed to adapt and overcome the challenges it faced. An example of the company’s resourcefulness was selling election-themed cereal (“Obama O’s” and “Cap’n McCain’s”) to raise funds.
The company’s concept was born out of a problem: during conventions and other big events, all nearby hotels are not only mega expensive, but also usually fully booked.
That why’s the Airbnb cofounders decided to launch a website called Air Bed and Breakfast, letting customers sleep on their floor in exchange for a cheaper price. Fast-forward to now, and the company boasts over 7 million accommodations and over 750 million guest bookings in 220+ countries.
But remember that rocky start we mentioned? Originally the website only got a couple of bookings, and many were skeptical of the idea, hypothesising that criminals would exploit the service to victimise visitors. Despite this, some people still utilised Airbnb, but not enough to sustain the company long-term.
So what did Airbnb do? They spoke to their users about how to improve their service.
As New York had the highest amount of Airbnb users, the team travelled there to speak to them in person. What they discovered was that people were put off by the low-quality images that hosts were uploading. So, the team went round to the hosts’ listings with cameras to take proper pictures of their living space. This created traction for the company, allowing the company to attract a series of investments along the past few years, leading Airbnb to grow exponentially and become the mogul it is today.
What Airbnb did right:
Noticing a problem worth solving that affected a sizeable market.
Providing a practical solution.
Adapting when times were tough.
Speaking to their users.
Acting on their findings.
What Airbnb is doing wrong:
Amid COVID-19, Airbnb has been forced to adapt and you could say that they haven’t been doing too great, check out the video below.
Once you know you have a solution to a problem worth solving, the next step is to validate your solution.