There was a discussion recently about whether we are in a tech startup bubble. With the frothy valuations that some of the companies are getting, it seems fair to say that there is a bubble. Most folk will be quick to add, “But … things are different this time.”
For one, investors have learnt to come up with clauses that will protect them from the downsides. There are also a lot of folks who are stating that if there is a correction, then it would be for the B2C (Business to Consumer) focusing startups that are struggling – or have raised a lot of capital and are still struggling – rather than for B2B (Business to Business) startups.
The logic makes sense, partly because in the B2B world, things are self-correcting. If you build a business, launch it, and 18 months later you still don’t see any signs of profitability or growth, then you know whether to keep the shutters open, or not. Things can be quite dicey and unclear in the B2C world.
My theory is: there is no bubble as long as the cheque cashes. No absolute promises can be made, but as long as you are able to cash in the cheque, there is no fault and the world keeps on progressing.
With so much capital around chasing too few opportunities, is it just a case where entrepreneurs are not able to find good problems to solve? It does not look like poverty or any of the inconveniences of our day to day living are eliminated, right? If that is the case, there is still a place for entrepreneurs to build and roll out products that solve problems. Based on these products, they can build a business around it and build value.
If you are looking to get started, here’s a slightly different way of looking at how to start. Instead of reading the plethora of online news of who funded who for how much and thinking that you can do the same, just go out and find problems. You might need to turn off your cellphone and talk to actual people, but just go ahead, and make a list of all the problems you see around you. If you listen and pay attention, you will notice the moments when people whine, complain and talk about the little inconveniences which bother them everyday. Jot them all down and see if these little inconveniences amount to something significant. If they do, you have found an opportunity.
It seems fairly simple, but is perhaps an oft overlooked method of how people get ideas to start a company. There might be some truth to this statement: instead of building a product and looking for customers, look for problems and ideate solutions for them. Ideas are only complete if they are part of a solution.
What do you think?
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