
To start a billion dollar startup, start looking for problems - hammadnasir
http://startupstunned.blogspot.com/2017/08/want-to-start-billion-dollar-startup.html
======
danieltillett
What you really want to find are the 25 million dollar problems that you can
turn into a monopoly. Sure you won't ever be famous, but you will have a great
lifestyle that is 99% of what a billionaire has on the upside with none of the
downside.

~~~
hyperpallium
> turn into a monopoly

Sure, but how do you do that? There's lots of textbook stuff
(patents/copyright/trademark, consumer habit etc), but in practice, you must
continuously improve it, promote it etc, to _keep_ that "monopoly".

There's no monopoly; only temporary monopoly. [But I'm interested to hear your
thoughts]

~~~
SwellJoe
The more complex the solution, the easier it is to lock it in permanently.
People don't want to learn a new complex thing. Note that this means the
minimal complexity (or close to it). If you implement something that _could
be_ simple, and you make it complex, someone else will come along and make it
simple and kick your ass at market.

Imagine you've got a warehouse automation system (this is not an example of a
$25 million dollar business, just an example of a problem that has no simple
solutions) that is ten times as efficient for employees as the current pad-
and-paper solution. If you arrive first and lock in that industry with the
market leaders in owning warehouses, you don't have to worry about a
competitor coming along five years later with a system that is eleven times
more efficient than pad-and-paper and that costs 20% less than your system. It
cost the company a half a million dollars to train all of their staff to use
your system. It'd be crazy to migrate.

So...not a monopoly, but a comfortable lock on a significant portion of the
market.

~~~
saosebastiao
You do know that there are _thousands_ of companies in the warehouse
automation space, right? And that "pad and paper" (whatever broad brush that
is supposed to mean) isn't really used anymore for anything but small
warehouses that wouldn't be a profitable target for warehouse automation
software? And that there aren't any "market leaders" that own most of the
warehouses...you'd have to lock up thousands of the biggest companies even
before you got to 10% market share?

I understand the point you're trying to make, but that was a terrible example.
Even then, I don't agree with the answer. Complexity isn't a deterrent to
market, otherwise some company would have locked up international
import/export by now. The market's response to complexity isn't typically a
monopoly but rather very fragmented hyperspecialization (which is the case for
both international import/export _and_ warehouse automation).

What people are suggesting here is very well studied in economics: it's called
a natural monopoly. And suggesting that you just focus on building a natural
monopoly is about as facile as suggesting you just become a billionaire.
Building a natural monopoly takes a mountain of time, money, and expertise.
It's way harder to build a natural monopoly than it is to build a $1B business
that has to compete.

~~~
SwellJoe
It was a hypothetical example. I know nothing about warehouse automation
(though I know it is not using pad-and-paper as I assumed any intelligent
reader would understand I was making up a hypothetical world where warehouse
automation didn't exist yet), but I know it's complex and I know that if a
company with a lot of employees trains them in a complex system, the odds of
them changing that system are very low.

And, as I said above: It's not a monopoly. But, it is a comfortable place to
exist profitably without a lot of risk of losing your customers.

Also, you've wholly missed my point about complexity. Some problems are hard
because of external, uncontrollable, unpredictable, complexity. Import/export
is _that_ kind of complexity. I'm talking about predictable complexity. Again,
to come back to warehouse automation as an example, which you hate, but makes
my point. A warehouse has a lot of moving parts (people, machines, inventory,
shelves, whatever TF), but it is finite and is a mostly closed system. The
inputs and outputs usually match up, and you can predict what's going to
happen with ins/outs and all the people and things that make the things move
in and out. It is complex because it is large and there are a lot of people
involved and many of them would need to be trained to use any new system that
automates it. It is _not_ , however, chaotic, and involving many competing
factions, like import/export.

~~~
hyperpallium
Unpacking that a bit, training costs are to do with interface complexity (in
the sense of "necessary" complexity) due to integration with other systems,
and other information. i.e. it's not 100% automated; you can't just press a
button. It's more "amplification", where you must be trained and practised to
use it effectively - a tool for skilled labour. If you're super-successful,
yours becomes a de facto standard, which others copy (usually, you still
command a premium; but for the life-style idea here, we'd want to avoid that).

This might be included as "installation" costs, along with and engineering
integration with other information systems, Related is the organizational
purchasing process, expensive for larger transactions: determining
requirements, evaluating alternative vendors and solutions, sign-off from
legal and upper management, and so on. Change itself is disruptive, there'll
be teething problems, other systems will have to adapt, and other knock-on
effects apart from training itself. These are one-off costs that you'd prefer
not to incur again, unless there's a very large benefit (your example of 10x
is worth it, but not (11/10)x).

All are switching costs.

------
swah
> Want to start a billion dollar startup?

> basically what you have to do

Just.. cringe. The book recommendation reminds me of this joke:
[https://www.amazon.com/How-Made-290-Selling-
Books/dp/B073DMV...](https://www.amazon.com/How-Made-290-Selling-
Books/dp/B073DMV56J)

~~~
lou1306
As an aside... For those not in the know, the "author" of said book is a
member of funk group Vulfpeck, which I highly recommend listening to.

------
syntaxing
When I took my optimization and design class in college, our professor would
tell us "It's always smarter to find the market then design the product,
rather than designing the product and finding a market for it".

------
inthewoods
What I this misses (in it's rather click-baity title) is that most problems
are not going to be companies that are worth $1b. There is a very small slice
of problems that end up at $1b. Most, I would imagine, end up being one time
problems that are worth very little.

~~~
iplaw
Or that a large portion of the solutions to said problems require R & D spend
in the hundreds of millions, if not billions.

------
pqwEfkvjs
It is far more easier to create problems for whatever you are trying to solve.

~~~
SQL2219
Now this is funny, 5 stars.

~~~
TeMPOraL
This is also the tried and true strategy - the favourite technique of sales &
marketing people. Create a (usually _perceived_ ) problem, sell the solution.

------
ThomPete
This is exactly the right strategy but finding big enough problems can be an
issue.

I asked this question in Hacker News two years ago.

What problem in your industry is a potential startup.

[https://news.ycombinator.com/item?id=9799007](https://news.ycombinator.com/item?id=9799007)

It was a very interesting experience and I wrote an essay about some of my
findings.

[https://medium.com/black-n-white/the-problem-with-
problems-4...](https://medium.com/black-n-white/the-problem-with-
problems-47ee63bb3511)

------
slice_of_life
> come up with a solution which is easy to implement

This might be better phrased as, "a solution that's easy to scale". I don't
think the implementation part of most valuable things is remotely easy; at
least from my experience.

~~~
hammadnasir
Thanks for the advice. I've edited the blogpost.

------
Mahn
For examples of ideas in search of a problem (rather than addressing a
problem), see the vast majority of projects that have done an ICO this year.

------
k__
That's the problem, haha :P

We all got a big bunch of ideas and probably not 1% of them make any money. I
mean just look at Twitter ;)

The problem are finding people who...

...think I can help them, so they talk to me in the first place

...have problems I can solve

...can formulate their problem

...don't want to own the solution and sell it on their own

~~~
jamaicahest
You're not going to suddenly build a logistics system for dairy farmers,
because you're not a dairy farmer and you don't know what kind of problems
they have. But look at your own daily life. Your kids school might have some
problems you could fix? Your daily shopping might have some annoyances you
could invent a solution for? Look at your own life and stop ignoring the
boring problems, while looking for the glamorous opportunities. Maybe keeping
a pet has some annoying obligations that could be easier?

Talk to people in your everyday life, your doctor for example and find out
what annoys them in their lives, doesn't have to be at work.

------
dswalter
Even better than observing yourself is watching other people and trying to
figure out what their problems are. If done with empathy, the side benefit is
that you further develop abilities you will need if you ever have employees.

------
cdiamand
As a side project, I've begun collecting ideas and posting them at
[https://oppslist.com](https://oppslist.com)

Most, if not all, are NOT billion dollar ideas though.

~~~
FLUX-YOU
Those descriptions and prices don't sound like they resemble anything close to
what you should be charging people. You'd have to put an extra zero or two on
most of them.

------
amelius
If people were more open about their problems, we wouldn't need to find them
in the first place.

~~~
AznHisoka
try searching for problems on bloomberry.com

~~~
amelius
Could you give an example of how a query could lead to a product idea?

------
emcf
In my locality connecting to small cities, transportation is big issue. There
is no reliable service. Is starting a transportation service like Uber or Lyft
viable? How should I evaluate the market?

------
no_wizard
I wonder if a profitable niche would be a startup that helps other startups or
people looking to start a startup find Billion dollar maker segments ;-)

------
jlebrech
my problem is the whole development lifecyle, there's no "code n run" anymore,
when you have to continually deploy and test.

~~~
tmat
So build your own things and do it your own way. I find that is what works
best for me. Put food on the table through contracting, build my own things
around the contracts to provide recurring revenue. Keep going till it's
enough. I hated everything about office culture and have never been happier.
Right now for me that's about 20-30hrs per week freelance to make a great
income, and I spend 20-30hrs per week working on my own projects.

~~~
Sholmesy
So, this is something that I would really like to do, mind answering some
questions :D?

When you say "freelance" are you contracting 'on location', or 'remote'?

On location, I can't seem to find anything that isn't basically a 40+ hour
gig, negating the benefit of 'freelancing', and remote seems to be highly
competitive/lowest common denominator.

I'm a decent developer (backend), in a decent tech city and I'm struggling to
find a way to ditch my 9-5 in favour of doing my own thing.

Any resources/advice would be appreciated.

~~~
tmat
all remote.. i scower the web for RFP's and people looking for developers and
pitch my services.

------
ljw1001
Want to start a $1 startup? Start finding problems instead of ideas.

Works at any scale

~~~
boyce
Back to the drawing board then, pg says to do things that don't

------
amelius
Does scratching your own itch count as finding problems?

~~~
sharemywin
I think if you're talking figuratively, yes. Literally, no.

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curiouslurker
why is this on the front page? It is devoid of content.

~~~
hammadnasir
And why do you think so?

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lazybreather
Snapchat, bitch!

------
slackoverflower
Or you could create a problem to solve! Uber is trying to underprice the taxi
industry into bankrupt, then there will no more taxis and only Uber!
Capitalism!

~~~
jamaicahest
Or Snapchat. Did kids and teenagers have problems connecting with other kids
and teenagers before Snapchat existed? I know I didn't. My parents didn't.
Their parents didn't and so on. Until Snapchat showed us that we couldn't live
without it, nobody had a problem connecting to each other.

~~~
to_bpr
Snapchat's value prop has nothing to do with connecting with one another. It
originally lay in its proclaimed transient nature and ability to communicate
off the radar from parents/relatives which at the time had begun to "infest"
other social media.

