27 Dec 2019
Why we need more Problem-Solving Start-ups in India?
I was recently reading
an article by Prof Michael D Alter, from the University of Chicago, on Startups
forget about the technology. He wrote “In the startup world, it isn’t
necessarily the best product that ultimately wins out. Rather, it’s the best way
to solve the problem.”
In several interactions with first time entrepreneurs, I’ve often seen this learning missing. Many of them often forget that ultimately the main purpose of a business is to provide customers with a product that they need by solving a problem that they have. Even if we study the most successful technology start-ups, we realize that they solved a problem, and used technology only as an enabler in that process.
And while there is no recipe for success in the business world, some insights that I’ve learnt through my own experience of being an entrepreneurial investor, and through many interactions with successful entrepreneurs are that,
- Your business needs to solve a need:
Whether it is problem in the sector that the existing player isn’t able to solve, or it’s a demand that is not getting met, at the core of any business model there needs to be a customer need.
- People need to be willing to pay for it: There are several companies that fail to think through whether people would be actually willing to pay for their product or service that they are providing.
If your product does not provide real value, no one will be willing to pay for it.
- Good execution is everything: One of the biggest differentiators between a good business and a great business is the detail to execution.
And while the role of luck cannot be ruled out in any business success, the biggest value-add that the start-up ecosystem in India brings, is the encouragement that it gives young graduates and professionals to become entrepreneurs if they see a problem that they would like to solve.
So, as we end a year where there has been a lot of discussion on what has not worked in the failed startups that have got large funding in the last few years, my belief is that keeping things simple and sticking to business fundamentals, makes the struggle to get that initial funding for your startup in today’s environment a lot easier.