A founder’s opportunity

“Al mal tiempo, buena cara”

In March of this year, I was pitching a well-known Silicon Valley investor over cappuccino at Mayfield Bakery & Cafe in Palo Alto. At the start of our conversation, the investor leaned forward and looked at me intently. “What’s the problem you’re solving?” she asked, with a hint of challenge in her voice.

“We solve the information overload problem for managers,” I answered. The investor’s eyes flickered as she evaluated my response.

A favorite question of investors is to ask entrepreneurs which problem you’re solving with your product or service. However, one question that investors never ask is, “if you’re successful, which new problems will you create?”

So an interesting question for founders to consider is: if your venture is successful, which new problems will you create for others to solve?

As one example, Facebook is an established company with a $150 billion market cap and over 1.2 billion active users. Interestingly, Facebook’s success has resulted in problems — or stated differently, opportunities — for new ventures such as Secret and Snapchat.

In contrast to Facebook’s requirement that users share real identities and post information publicly, Secret and Snapchat enable users to post information which is anonymous and evanescent, respectively. As summarized by Union Square Ventures partner Fred Wilson:

“I think a lot of what we’re seeing is a reaction to Facebook…the things that Facebook forced you to do — to use your real name, to post something publicly that everybody could see…these are things that people ultimately had a bad reaction to.”

Notably, Secret and Snapchat have achieved significant traction with users and raised a combined $140 million from investors.

In a second example, the success of urban transportation company Uber has resulted in new opportunities for both existing and new businesses. Last November, the company announced partnerships with GM, Toyota and financial institutions to increase the supply of Uber drivers. More recently, rental service Breeze launched to provide cars for aspiring Uber drivers.

So if you’re a founder contemplating a new venture, one way to evaluate potential opportunities is to consider which companies are becoming so successful that they create new problems for others. One company’s problem is a founder’s opportunity.

 

Tienes algo que decir?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s