Technology looking for a problem
In a startups capitalising on a technological change is important, however customer problem should come first
One of the essential ingredients for a successful startup idea is an ongoing or anticipated change. Successful founders spot a trend or an insight hence gain an unfair advantage in the race for the market share. In tech startups, such changes are frequently technologically-driven - think about the major trends like the Internet or iPhone. Companies like Amazon or Google capitalize on these changes and gain a significant advantage over the competition.
Unfortunately, some founders, especially the founders with deep technical insight, tend to focus on new technological opportunities first before finding a relevant customer problem worth solving. Such conversation quickly becomes a conversation that I call ‘Technology looking for a problem’. Another term coined by Jared Friedman from YCombinator for it is a "Solution In Search of a Problem" or SISP:
...so, imagine you come up with a startup idea "Uber for plumbers." It's an app, you push a button, a plumber shows up. This is a solution. What problem does this solve? I don't know. Maybe it's hard to find plumbers. That might be a real problem, but my point is if you come up with an idea like this, you are starting with a solution...
When founded elastic.io in 2013 we spotted the major trend in business software - move to the cloud. Enterprise software, that was traditionally distributed as on-premise installations now has to be lifted to the cloud. Cloud and SaaS models provided significant benefits for both vendors and users however, it was hard for traditional vendors to (a) rebuild their software for scalability and multi-tenancy and (b) change from the perpetual (one large license payment) to SaaS/subscription licensing model (many smaller subscription payments). We were so excited by that technological change that we didn't spend enough time finding a relevant and urgent customer problem. We thought:
Cloud-based software is so amazing, there must be someone willing to pay us for it!
It was a big mistake. Instead we should had spend more time interviewing potential customers and identifying a real business problem.
Advanced technology and an answer to the question 'Why now?' is essential for each startup pitch however, when founders spend more time talking about the product than talking about the problem, it's a big red flag for me.
So, how to fix the situation when all that you have is (what you believe is) an amazing technology? My suggestion would be to roll back and try to identify an urgent customer's problem. Try to speak to as many potential customers as possible. Try not to talk about your product but rather focus on the top-3 challenges your customers have right now. The best book I can recommend on this topic is The Mom Test.
It describes, based on the great examples, basic mistakes founders make when talking to the customers and how to avoid them. If you a startup founder and haven't read it yet, you should do it ASAP. And if after that you still don’t know where to start or how to find the right people just drop me a line, I’ll try to help.