Identifying the right pain point to solve can be the key to building a successful startup
High-profile west-coast investor Peter Thiel says that the best founders should have a secret. At Entrepreneur First, we believe the most reliable way to find a secret is by leveraging your existing skills or knowledge. The best founders work on ideas at the intersection of an area they know deeply and where they have advanced skills that allow them to out-manoeuvre others. Sometimes it will be through combining one founder’s skills and another founder’s knowledge.
For example, Larry Page and Sergey Brin used the research from their PhDs at Stanford to create the first version of Google, while John and Patrick Collison created Stripe because they’d experienced the pain of trying to integrate payments. Would Page and Brin have been the best people to build Stripe? No. They lacked the understanding of the problem. Would the Collison brothers have been well placed to found Google? No. They didn’t have the academic background to build PageRank.
Founders who understand a problem deeply should see this as an asset that they can create fresh ideas around. Having deep knowledge means that you can provide singular insight into the problem. When a founder tells me something shocking or surprising about an industry – something that I couldn’t have guessed as an outsider – I know that they are in the position to create something unique.
The easy option
It is easy for first-time founders to pick problems that they may have experienced once but for which they don’t have the deep expertise or advanced skills to solve. This is where ideas around things like food delivery, dating and house renting often come from. Why do founders do this? It feels easy.
When you have limited knowledge about a market or a problem, you don’t know the challenges that you will face. This space is often highly competitive: there are low barriers for founders to enter the market, it’s relatively easy for other founders to come up with the same idea and many entrepreneurs have a similar skill set. This makes startups in this space hard to defend.
What is the right idea for you to be working on?
The right business for you to build is different from the right business for your peers to build. To ensure you’re building the most valuable startup for you, it’s important to utilise the skills and knowledge you already have, understand why you’re unique and build something valuable.