Often, entrepreneurs ask me how to identify opportunities for new ventures or ideate on potential ideas because of my experience as a management consultant and operator at startups. During the first part of my career, the question was asked like this: 'How do I come up with a startup idea that’s guaranteed to be successful?' As mentioned in Robert Collier quotes, 'Start where you are. Use what you have. Do what you can.' This quote underscores the importance of taking action with the resources and knowledge available to you, rather than waiting for the perfect opportunity to arise.
In recent years, I’ve noticed a shift in the questions asked by young entrepreneurs. Instead of focusing solely on creating a marketable idea, they now inquire about identifying meaningful problems to solve. This change reflects a shift towards community impact and scalability. As part of this evolution, resources like interesting posts about marketing secrets become invaluable, offering insights into consumer behavior and effective strategies for sustainable brand growth.
My hypothesis is that a meaningful career is directly correlated to the value you create. And while “value” is an ephemeral and over-used term, my somewhat simplistic way of thinking about value creation is:
[Expected value creation] = [Impact of successful outcomes] X [Probability of success]
In the above, “impact of value created” is primarily driven by the strength of the ideas or the vision. The probability of success is driven by the ability to execute well.
How to execute is covered ad nauseam in most business writing, but I haven’t come across a compelling framework to think about value creation and impact. While all frameworks are an oversimplification of the real world, this one can give you a great place to start your brainstorm and find an idea that fits your passion and experience.
When looking at the first variable in the equation, the key is to have a vision that creates an outsized impact in case of a successful outcome. Jim Dator famously said that “Any useful statement about the future should at first seem ridiculous.” So it becomes imperative to choose a problem that can meaningfully alter the status quo.
A way to think about it is as follows. If we place the human experience on a bell curve, with zero being the worst and 100 being the best, we can assume that the mean or average human experience is around 50.
The startups that have the most outsized impact move the average human experience forward. There are three ways to do this:
1. Solve a problem that affects the majority of folks around the mean and thereby improve their lives. This moves the human experience mean from 50 to 60.
2. Push the envelope and move the leading edge of human experience forward, from 100 to 120.
3. Tackle the problems ailing the folks who need help the most. This moves the human experience from zero to 20.
My hypothesis and recommendation to founders is to be on the outskirts of this bell curve. Here’s why: While there’s value in pursuing any of these three startup paths, I think the majority of problems in the middle already receive a lot of attention and resources from large organizations and local governments.
And, though the problems at the end of the spectrum might be more challenging, they’ll also be more rewarding. Moreover, as an entrepreneur, your risk tolerance is probably higher than most. So don’t focus on “50 to 60” problems.
Now that we’ve hypothesized that you’ll do the most meaningful work by moving the human experience from zero to 20 or from 100 to 120, which one do you choose? This is where it becomes more personal.
To decide which end of the spectrum you’re going to work on, you need to understand what motivates you at a fundamental level. Get to know where you find meaning from a challenge and let that guide you towards the end of the spectrum that you feel most passionate about.
A zero to 20 problem is one that improves the lives of those who are living with the lowest quality of life across the globe. A startup working to solve zero to 20 problems might be working on access to clean drinking water, reducing environmental pollution, eliminating infant and maternal mortality, or improving crop yields to end hunger.
If you’re intrinsically motivated by the impact your work has on society at large, you may want to tackle a zero to 20 problem. These problems may or may not be technologically challenging, but the impact of solving these problems will be huge.
On the other side of the spectrum, you are moving into the frontier, taking the human experience from 100 to 120. Most advances in the human experience on this end of the spectrum deal with advances in technology and science. For example, problems that require foundational advances in computer vision or deep learning and the various applications of these advances.
If you’re intrinsically motivated by solving really difficult problems, and you find the process of solving such problems very rewarding, you might be 100 to 120 type of a person. Here, you may not know what the impact of the solution will be, but the problem you attempt to solve must be significant.
Here’s a simple exercise to help figure out what might intrinsically motivate you: Imagine that you have the ability to solve clean, renewable energy. Something that brings the cost of renewable energy down to zero and can be distributed in an economically viable way. Pause and think about it for 30 seconds.
If your first thought is to think of all the billions of people whose lives will be fundamentally uplifted, then my guess is you’re a zero to 20 type. However, if your mind went to “What would such a technology look like?” or “How would you even do something like this?” then you’re probably a 100 to 120 person.
One of the biggest mistakes startup founders make is trying to solve problems at both ends of the spectrum simultaneously. Unfortunately, you can’t do both. (That is, unless you're Bill Gates.)
As a startup, you have the opportunity to take risks and think outside the box. You’re not stuck with traditional ways of thinking like governments or large organizations that are working on solving problems in the middle of this spectrum. Working on a problem that you feel authentically passionate about will help you commit to your startup, push it past the normal limits and reach success.
There are many factors that contribute to the failure of startups. Key among them is the failure to keep proper financial records which could lead to insolvency. This, however, should not spell doom for new business since it’s easy to get insolvency advice for small businesses these days.
