Founding a business, whether it be a small corner shop, a restaurant or an online digital startup, is never easy. Founders and business owners have multiple issues attempting to draw away their attention, such as competitors, cashflow, funding, product, sales, and location. With that in mind, this series will cover how to found a business in the 21st century, focusing specifically on a digital technology startup.
When founding any kind of business, the first thing to think about is to make sure you are solving a problem. Without this, there's no reason for anyone to use your startup's product. It's important to keep in mind that while you may think you have a solution to a problem, the problem may not actually exist. This is why many businesses, both "traditional" and digital, fail quickly -- because what the founder thinks is a problem isn't actually a problem at all.
Let's think of a traditional business example.
Say someone wanted to start a business for a new corner shop in their neighborhood, because they thought people didn't like going to the big out-of-town supermarket or the smaller chain-owned convenience store in the center of town. They lease the premises and buy stock from a wholesaler, and when they open, the shop gets a few interested customers who buy a couple of items.
But the expected influx of customers from the local neighborhood never arrives, because there wasn't a problem in the first place. Most people in the neighborhood own a car and don't mind going to the out of town supermarket, where there's a much larger selection than our friend's small corner shop and the convenience store in town, plus it's cheaper there too. And for quick items, people don't mind walking an extra five minutes to go into town to the convenience store, where they can do other shopping as well.
Many entrepreneurs focus on the solution without identifying a problem first. (Image: Andrew Neel, Unsplash)
As you can see, what our business owner in the example above thought was a problem wasn't actually a problem. The same happens with digital tech businesses; a founder thinks they have identified a problem and quickly puts together a product which, supposedly, provides a solution. They release the product to great fanfare, but fails to get any real traction past early users.
So how can founders avoid doing this backwards and coming up with a solution without a problem?
By identifying users and the target market before starting any work on a product, and asking questions that get to the root of the problems customers have, if they have one at all. Therefore, any entrepreneur looking to found a business must identify, beyond all doubt, an existing problem before embarking on working on a solution. Anything else is akin to attempting to fit a square peg in a round hole -- it just won't fit because there is no market for it.
In part 2, we'll look at how entrepreneurs can identify a problem by focusing first and foremost on the user or customer, and how to offer the customer value in a product or service.