I’ve been noticing a disturbing trend among startup founders who seem to believe that running a startup is a get-rich-quick scheme. While this mindset is misguided and naive, I suspect there’s something more insidious at play: a fundamental misunderstanding of what startups are for.
Business 101: Exchanging Value
Any business exists to exchange money for value. Your local lemonade stand does just that: you have a dollar and you’re thirsty on a hot summer day? You can exchange that dollar for a drink (and the joy of seeing entrepreneurship in action, if that’s your jam). The thing is, most obvious problems that have obvious solutions don’t need startups. Those markets are very well covered by incumbents.
The Role of Startups
Where tech startups come in is overlaying the desire to solve a problem with a hunger to disrupt: using an unfair advantage (usually technology, but it’s also possible to disrupt other aspects of the value chain, such as business models, logistics or pricing models) and a bold idea means that startups can take a stab at solving a major issue.
The Problem with Easy Solutions
If the problem you are solving isn’t inherently hard, that’s a huge problem in itself, for a number of reasons. The biggest problem is that you immediately lose your competitive advantage. Startups that tackle challenging problems are the ones that stand out, create value and, ultimately, succeed.
At the heart of every successful startup is a unique value proposition. When a startup solves a hard problem, it creates a solution that didn’t exist before, providing value to customers and making the startup indispensable in its industry, ideally in a way that nobody else has done before.
The "Hard" Factor
So where does the ‘hard’ come in? Well, simple solutions are relatively easy to copy, and it makes the startup’s moat (or its defendability, if you will) way too shallow. When a successful company comes along, there will be dozens of founders who think they can do it cheaper or differently, in ways that are somehow ‘better’ than the original company.
If the original solution wasn’t hard, then, well, the disruptors may become the disrupted rather quickly. What Makes a Problem Hard?
I usually ask startups the same questions: Why you? Why this? Why now? What is hard about this? Great founders are able to answer all those questions with enthusiasm and certainty. Mediocre founders are often stumped.
The Benefits of Working on a Hard Startup
Knowing what is hard about what you are doing keeps you honest. It keeps you pointed in the right direction. It helps illuminate and motivate and gives a reason to keep going even when the going gets tough. Solving a hard problem could make the rest of the industry take notice.
As an innovator, thought leader and trailblazer, your life becomes much easier. Sales and marketing is easier, attracting top talent is easier, and ideally it means you’re able to charge a premium rate for your products or services.
The Importance of a Great Team
But this also means that you need to have a great team. The team is the most important aspect of any startup. If you don’t have an extraordinary team that has perfect founder/market fit, you won’t be able to approach the challenges at hand with a fresh perspective.
Building a startup is never easy, even if you have the best team in the world. And if it seems like the company you’re about to start will be a sure-fire win, you’re probably wrong. There are a lot of smart people already working on the problem you are trying to solve — and if it seems easy, you must be missing something.
Conclusion
In conclusion, startups should focus on solving hard problems that have an unfair advantage or disrupt existing markets. This requires a great team with perfect founder/market fit and a unique value proposition that creates value for customers.
By working on a hard startup idea, entrepreneurs can create a competitive advantage, solve major issues, and become indispensable in their industry. But it’s not easy – it requires dedication, perseverance, and a willingness to take risks.
What Makes a Problem Hard?
A problem is considered "hard" if:
- It has an unfair advantage or disrupts existing markets
- It requires significant resources, expertise, or innovation to solve
- It involves complex systems, processes, or technology
- It has high stakes or consequences for failure
- It requires collaboration and coordination among multiple stakeholders
By understanding what makes a problem hard, entrepreneurs can identify areas that require innovation, creativity, and perseverance to solve. This is where the most valuable opportunities lie – in solving problems that are truly challenging and creating value for customers.
Final Thoughts
In summary, startups should focus on solving hard problems that have an unfair advantage or disrupt existing markets. By doing so, entrepreneurs can create a competitive advantage, solve major issues, and become indispensable in their industry.
It’s not easy – it requires dedication, perseverance, and a willingness to take risks. But the rewards are worth it: creating value for customers, driving innovation, and making a meaningful impact on society.
So, if you’re an entrepreneur looking to start a new venture, remember that solving hard problems is key to success. Focus on what’s hard, not easy, and be willing to take the necessary risks to create something truly remarkable.
