What Founders Get Wrong About Successful Startups

Startup founders often begin with an idea that interests them. But without a real problem, your startup has a low probability of success.

Ideas vs. Problems: The Foundation of Startup Success

When building a startup, where you begin matters more than most founders realize. Your starting point is your business’s foundation, and just like with building a house, if your foundation is bad, everything you build on top of it has the risk of crumbling. The difference between starting with an idea and starting with a problem can determine whether you are starting with a strong foundation that will lead to success or a weak foundation with a high probability of failure.

At a high level:

• An idea is a concept or vision a founder believes could be valuable. It often stems from imagination, inspiration, personal experience, or personal interest.
  
  
• On the other hand, a problem is a real, painful need that a significant number of people or businesses face, which creates true market demand for a solution.
  
  

Ultimately, problem-driven startups are far more likely to succeed because they are built based on real customer needs and pain points.

Ideas vs. Problems: What’s the Difference?

Origin

• Ideas often come from a founder’s personal interests, experiences, or inspiration and rarely originate from in-depth research or customer discovery.
  
  
• Problems are grounded in reality and identified and validated through research. They’re uncovered through methods such as user interviews and user observations and reflect a pain that already exists in the market.

Market Demand

• Ideas require founders to create demand by trying to convince users to want what they are building.
  
  
• Problems already have natural demand because the users are actively seeking a solution or using a solution they are unsatisfied with.

Validation Approach

• Ideas are typically validated after the product is built, with founders looking for confirmation that they’ve built something the market wants.
  
  
• Problems are validated before anything is built by confirming with real people the problem is real, frequent, and truly painful.

Solution

• Ideas result in products that are often shaped around the founder’s vision instead of being shaped by validated customer needs.
  
  
• Problems result in products shaped around real pain points and needs, making product-market fit more likely.

Risk Level

• Ideas are higher risk because you're betting on people buying into your vision even though they may not need what you’ve built.
  
  
• Problems are lower risk because users already spend time or money solving them.

Examples: Idea-Based vs. Problem-Based Startups

Let’s look at some examples:

Idea-Based Startups

1. Smart Toaster App
   A founder wants to create a smartphone-controlled toaster so people can toast bread remotely. While inventive, this solution does not solve a painful problem. Currently, people aren’t struggling to use their toasters.
   
   
2. Pet Social Media App
   A founder who loves sharing photos of their dog wants to create a pet-only social platform. However, there’s no clear gap in the market, and existing platforms like Instagram already serve this use case well.
   
   
3. VR Office Simulator
   Inspired by remote work trends, a founder builds a VR-style office space so remote teams can “walk around” virtually. It’s novel, but there's little evidence that teams want to simulate a traditional office.
   
   
4. Blockchain Signature Tool
   A founder builds a document-signing tool on the blockchain because they believe the blockchain is the future. However, if current tools (e.g., DocuSign) already solve the problem well, the blockchain angle may be unnecessary and not solve a true pain point.

Problem-Based Startups

1. Restaurant Waste Optimization
   After interviews and market research, a founder discovered that food waste is a significant cost driver for restaurants due to unpredictable customer demand. They build a predictive analytics tool to reduce waste. The product solves a real, costly problem identified through customer discovery.
   
   
2. College Student Storage Platform
   A founder learns from students that summer break creates a recurring need for affordable short-term storage. They make a peer-to-peer storage marketplace. This solution is built from a validated user pain point.
   
   
3. Compliance Monitoring for Financial Services
   Through conversations with compliance teams, a founder learns that monitoring internal communications for policy violations is time-consuming and inefficient. Based on user research backed by customer data, they build an AI-powered monitoring platform, and there is existing demand.
   
   
4. Supply Chain Risk Alerts
   After speaking with procurement teams across industries, a founder discovers a need for real-time visibility into supply chain disruptions. They build a monitoring system to alert teams of risk factors. The system directly addresses a known business risk identified through customer discovery.

The Takeaway for Founders

Start with a problem

• Starting with a problem ensures that what you're building is needed.
• It connects you to the needs and pain points of real users already looking for a solution to their problems.
• It gives you a stronger foundation for validation, growth, and product-market fit.

Ideas are often solutions in search of a problem.

Want to find out if you’re starting from a real problem or just an idea? Our team created a simple self-assessment founders can use. You can access it at the following link: https://mjj6sh35c31.typeform.com/to/FZstGjD4 

‍