Over the past couple of weeks we’ve been talking to some of the sharpest minds Australia’s technology sector, drilling down into the best practices for startups.
From creating a technology plan, to building a business plan and knowing what investors are looking for, our panel of mentors has regularly returned to a single theme — focusing on the problem you are solving. This, then, is one of the keys throughout the startup process — from coming up with an idea to creating a strategy; from bringing on staff to reaching out to investors.
Always bring the thought process back to the problem you are trying to solve.
For Craig Blair, partner at AirTree Ventures, a connection with the problem being solved by a startup is literally the first thing he looks for in a founder. Blair is looking for someone with “a visceral connection with the problem they are solving”.
Having that deep understanding and attachment, feeling actual discomfort from a pain point in society, feeds through to the rest of Blair’s founder wishlist; “impatience (unreasonable expectations), ability to learn and take feedback, ability to evangelise an idea or a product, attract great people, resilience.”
Really caring about the problem you’re trying to solve, whether it’s finding a parking spot in Sydney or actually being able to receive parcels, is not only key to identifying an opportunity in the first place, but gives you the drive to keep going when times get tough.
Muru-D co-founder Annie Parker expands on this notion, explaining how important it is to have some experience and reputation with the problem you’re trying to solve and connecting it to the solution you’re putting forward. It will help you convince others — employees, customers and investors, that what you’re doing is right.
“It’s important to have some attachment to the problem you’re fixing too,” says Parker.
“Typically it’s people who’ve worked in that industry field, or have studied the topic for years, or perhaps have lived through the issue in their personal life. If you don’t have some experience in the area, then it’s really hard to convince others – whether that be employees, customers or investors – to come and join you.
But it’s not just at the early stages where this is important. The problem should be front of mind throughout decisionmaking. For instance, when SEEK co-founder Andrew Bassat considers implementing some new technology, the first question on his list is: “What is the problem that we are trying to solve?”
The answer to this feeds into the decision making from there. Looking at something through this prism immediately narrows your options, giving some focus. And from there, provides a metric for judging what you’ve come up with — having outlined the problem, is this the best solution?
And constant focus on the problem doesn’t end when you walk into the boardroom. Because your directors should be equally focused. “What they are looking for is a clear gap in the market,” says Tyson Hackwood, head of Asia for Braintree Payments.
When you’re speaking with your investors, when engaging your board, put your strategy in terms of a problem being solved. What is the problem? Why does it exist? How are you solving it? Who is solving it and why is your solution better?
“Investors respond to numbers,” says Hackwood.
“Do your homework and paint a clear rationale for who the audience is, why there is a current gap in the market, what are the competitive offerings available and how you’re differentiated.”
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