There has been a lot of recent discussion surrounding the role of startups, venture capital, Government, STEM education and various other elements that factor into Australia’s ability to be an effective creator of new economic and societal value.
I’ve read a number of well-written and well-thought-out pieces of content, like Mike Nicholls’ essay Let a 1000 Startups Bloom – Australia Needs A Quest, which explores the lack of technology billionaires in Australia and the role of government in removing legislative barriers. However, a large portion of the content I’ve read has been fixated on certain inadequacies that currently inhibit our ability to execute innovation regularly at meaningful scale.
I’m proposing that we shift the discussion directly to what matters; how we identify and then solve high-value, underserved problems for large groups of people or organisations. This ability to identify and find unique solutions to undeserved problems, or in some cases, ‘secrets‘, is exactly why great entrepreneurs have been the primary drivers of new economic and societal value.
This isn’t to discount any of the content that has been written, but has to be the basis through which startups are founded in Australia, and scaled beyond.
It’s often been noted that not all problems are worth solving. This is an astute observation and one that has a lot of meaning to those looking to create (or benefit from) new and meaningful economic and societal value.
Do not spend years of your life building a solution to a problem no one cares enough about to pay for. The notion of Minimum Viable Products, the quest for constant validating learning or the ever important search for product-market fit may have become saturated topics, however the underlying message of “build your product and business model based on facts” is more relevant now than ever. The barriers, both technical and commercial, to launching a startup have drastically decreased, but this is no reason to build products and businesses that are meaningless.
Your product needs to solve an underserved, high value problem, fulfil unmet demands or create meaningful opportunities for people or organisations that are willing to pay. The key point here is pay and this shouldn’t go unnoticed. We should be focusing on building genuine and sustainable business models right from the beginning.
In many ways, this is the very premise of customer development and Lean Startup, and is one of the primary reasons that these frameworks are so valuable in any environment of relative (or extreme) uncertainty.
Generally, Australian entrepreneurs need to be more ambitious, and focus their time, effort and resources towards finding and solving society’s highest-value problems.
Incremental improvement should not be the objective, however I fear that for many Australian ‘startups’, this is exactly where their focus resides. Entrepreneurship is a calling, and the time of an entrepreneur should be spent only on that which makes a truly meaningful impact. To reiterate; finding and solving high-value, underserved problems.
When it comes to the ‘finding’ part, two colleagues from edgelabs whom I work closely with, Jen Storey and Stuart Hudson, have done some incredible work in this space. This particular area of problem identification has previously been defined as the ‘sweet spot’ for Problems Worth Solving,
A version of this can be seen below:
Identifying Problems Worth Solving (PWS), and Solutions Worth Doing (SWD), is achieved through determining the importance of a customers Jobs to be Done, the satisfaction they have with current solutions, and the satisfaction they see in your proposed solution.
The delta between the two measures of satisfaction determines whether your solution is a Solution Worth Doing.
What you need to search for (and definitively validate) are problems that are completely underserved; yet valued very highly. This is where the pain or potential for gain is most significant for customers and is also where the greatest potential to monetise for your venture exists.
The point? Spend your time towards the bottom right hand corner otherwise it will likely be wasted.
Obviously the mere identification of a potential problem worth solving doesn’t quite result in a billion dollars of economic value, so the process of delivering your value proposition, crafting your messaging, defining and optimising your acquisition channels, aligning your key activities, and keeping your revenues much higher than your costs now becomes your Job to be Done.
The colleague I mentioned above, Stuart and I have also spent time working through something that we’ve called Design DoingTM, which for us, and a group of our clients, has become an alternate validation framework to driving an idea, a vision, or potential Problem Worth Solving towards a commercially viable business model or new product category.
This is but one framework, and regardless of whether Design Thinking, Design Doing, Customer Development, or something else entirely works for you, the process of validating your Problem Worth Solving, attaining product-market fit, and eventually sustaining product-market fit, becomes the only thing that matters for your startup or new venture.
Having said all of this, I fundamentally believe that we can support entrepreneurship more effectively in this country, and as a result, become an enviable destination for new economic and societal value creation.
As an example, the Lean LaunchPad platform supports various commercialisation efforts globally, and has become a proven technique for measuring the journey towards product-market fit and the Investment Readiness Level (IRL) of a startup or internal venture.
With equity crowdfunding, AngleList syndicates and various other mechanisms to access capital becoming readily available, the options for a startup to fund growth or even validation is bordering on limitless. However, startups ecosystems are strengthened through liquidity; and liquidity is achieved when an asset becomes highly desirable and attainable.
By being able to better determine the journey towards product-market fit, and by genuinely assessing the IRL of a given venture through a proven mechanism, ‘Moneyball for Startups’, or the ability for investors, sophisticated or otherwise, to decrease their due diligence time and increase their chance of success, should become reality.
This isn’t the be all and end all of long-term solutions; we absolutely need more participation in STEM education, and we likely do need more Government support. However, this is a realistic and actionable framework that can act as our supporting platform for entrepreneurship and new value creation in the short-term, and its implementation doesn’t have any unmovable impediments.
Australia is not destined to be a nation that simply spends their time digging holes in the ground. We have every tool kit at our disposal to take full advantage of various opportunities to become vertical leaders in a number of industries.
As a community, we need to stop focusing on our inadequacies. Instead, let’s focus on finding and solving high-value, underserved problems for large, paying customer segments.
Featured image: York Butter Factory.