Are You Solving a Real Problem?

“I gotta’ fever and the only prescription is more cowbell” – “The Bruce Dickinson” –  from the SNL skit with Christopher Walken

Many of the startups I meet have gotten the message that in order to have a sustainable business model, one has to solve a problem.  That solution can come in a few forms – perhaps it is providing a capability that did not exist previously or making it quicker and more efficient to satisfy a recurring need.  For the former, I would suggest LinkedIn which opened up the world to our personal business profiles and for recruiters, gave them access to people who were currently employed – not just those in transition.  The latter would be characterized by Uber – transportation on demand.  So, the message seems clear, but achieving this goal has remained somewhat elusive.

I see a good number of pitches every week.  I think one recurring theme is the absence of an understanding of the importance of this message; you need to ease the pain or bring comfort for your product or service to be sustainable.  So, many pitches start with the standard “how many times have you tried to…  only to be frustrated by…” Unfortunately, at times, the “problem” they present is one that many of us rarely encounter like booking a trip around the world.  When the problem they present is not real, you can feel the silence in the room.  It makes me harken back to the old Family Feud scenario – you know, the one where the host asks a question like, “Name something that rhymes with ”time” and the overthinking parent responds “sublime.”  This is usually followed by an attempt at supportive applause from family members who know in their heart that answer is not going to appear when the host announces “our survey said.”

So, how does this happen?  I am still somewhat surprised at the lack of market research and even “web surfing” that is done when someone comes up with the centerpiece of their investment thesis.  It is like they are Bruce Dickinson, and all they are focused on is more cowbell.  As the great scholar in this space Jeff Timmons once said, “an entrepreneur knows the difference between an idea and an opportunity.”  Look, I am clearly not at the center of the startup universe, but when I see an idea which looks just like other pitches I have seen and a presenter is not even aware of that competing product or sights a difference such as “ours is a mobile app,” it makes you understand how tough this part of the equation really is.

So, please make sure that before you invest a lot of time and energy, you get some objective people (like advisors or others you know in your network) to provide some really critical feedback on how much “pain” is caused by the problem you are addressing.  It may take longer to get on the road to success, but with the right approach, you have a much better chance of completing your journey.

Aggressive Advisory Services – “Hated It”

A man’s got to know his limitations – quote from ”Dirty” Harry Callahan (Clint Eastwood) in Magnum Force

Over the years, I have had the honor of working with a variety of advisors to entrepreneurs.  They may have been lawyers, investment bankers/advisors, industry mavens or just general business consultants and I must say, the vast majority were really fantastic.  To me, a good advisor objectively highlights the pros and cons of an issue and presents their take on a solution, but does not force an answer on the owner.  Not crossing this line is critical especially if you feel strongly one way about an issue, and the entrepreneur is leaning in the other direction.  While it is painful, I have learned to respect the difference of opinion and have found in more instances than not, the entrepreneur was right.  While you may as an advisor try to walk in the entrepreneur’s shoes, regardless of how dedicated you are, you are not thinking about their business 24/7 like they are. That is just a fact of life.

It is in this light that I throw up the caution flag for those owners who have an overly aggressive advisor.  I see this happen especially where younger entrepreneurs are dealing with a more experienced advisor and the senior person basically forces their point of view in a particular situation.  I have recently seen two examples of this – one by a lawyer and one by an insurance advisor.  They both created an environment which was intimidating to the business owners – almost making them feel as if they were not qualified to make a decision.  They were dealing with issues where the owner had limited experience and the advice almost came across as “I will make this decision as you are not qualified to do so.” They seem to follow the idiom that “in the land of the blind, the one – eyed man is King.”

In both cases, I decide to intervene to get the decision back in the hands of the parties who would bear the consequences – the entrepreneurs. In one case, the advisor’s recommendation was spot on – it was the presentation that caused the confusion. In the second case, the advice was dead wrong and fortunately, it was fixed and the entrepreneur saved a boatload of money.

So, my message to advisors (who probably do not follow me) is simple; please remember what Dirty Harry said and remember your role.  To the entrepreneurs, never feel you are not in control of what an advisor suggests because whatever the decision, you are the one who has to live with any consequences.  Trust that instinct when you feel you are being pushed and you will do fine.