Do Great Startups Really Solve a Problem

After a long long hiatus (ie been far to busy working finishing a startup) I decided to write a post. My own blog is still lacking in posts due to work, but will get back to that this week.

Anyhow have been thinking about this for some time. I have looked back at several startups, we all know of Google, Yahoo, Indiatimes, Facebook etc etc, but I am wondering all these which got funding, did they really solve a problem, I mean isn’t that what all VC’s really want, or maybe they did and it was just me that didn’t have that problem in the first place.

Lets look at Google, everyone says it solved the problem of being a better search engine, or rather it was a better search engine than those that were around during those days (I was a fan of Lycos). But how did we know we needed better search, I mean you can only tell you need better search if you know what else is out there, and I for one dont recall comparing search results everytime between google and lycos to see which was better. Hence was google a success because of search or simply because of speed. Lycos was full of ads, we all had 28.8K modems or some of us have the V90, K56Flex modems, but speeds were still slow, when google came along it just returned the results quicker…not sure if they were better.

Now lets look at Facebook, If I was do come to a VC with cap in hand and say “Please sir can I have some more…funding that is” and my idea was to build facebook. I am unsure as to what problem I would actually be solving, is it to get people to communicate, or to waste time at work, or to connect. I am talking about seed stage funding here, not the 3rd rounds where VC’s just follow others. What problem did/does Facebook solve.

What did Skype actually do that Yahoo Voice chat could not (agree quality at that point was better), but did it solve a problem that people just needed to solve.

What about twitter, did we really have a problem with telling the world when we get up out of bed :-)

Did we really need a Zimbra, didn’t email just work before.

Did these companies and other really successful ones solve a problem, or are they just things that we use because out friends use them, and so we must also, and if that is the case, how would you ask a VC for money for something like that :-)

Iqbal

P.S Next post – How does a company like minglebox ask for $ 8 million …and what does it spend it on

12 Responses to “Do Great Startups Really Solve a Problem”

  1. Well its seems the post hit a home run :-)

    @ Saurabh – I agree on the gap, but there is never a measure if how big this gap is, i.e if the gap is big enuff then I guess its a problem being solved, so how does one work out how big the gap is ?

    @Sanjay: This is my point, I am wondering what VC’s think, i.e do business really need to solve a problem

    @Krish: I agree on the timing, from what I am reading VC dont really know, or care either they just want numbers, and by then every man and his dog can see that the business will be good enough to invest…which comes back to the point “On what criteria do VC’s invest”?

    @Rabi: I think what you are saying with the 2 types of problems, is that the first is a problem, and the second is a gap fill, like one of the other posters mentioned

    @Banibratta: This need is this then a function of just “I want it cause my friends have it” i.e the typical social network phenomenon that we have seen…i.e the tipping point/critical mass scenarios. Again how can a VC see this, or do they actually see anything except just guess. If so then are people in the valley better guessers?

    @Upendra: I think you hit the nail on the head, with the ‘need” category. If we do not have a need we will never use anything, hence this is default, but what I am trying to work out is that when VC’s ask “does it solve a problem” how the hell is anyone supposed to know, because you can only ask friends and family, ans surely there is no way anyone knew facebook solved a problem

    @mohit: Again my point is that I am not saying it needs to solve a problem….but why do VC’s ask for this, if most of the big ones never did, nor at least did not seem to when the started.

    Guys great replies, and in my next post I have another little problem….Great teams

  2. Mohit Ranka says:

    Hi Iqbal,
    I dont completely agree with you. It is not always about making life better solving a pre-existing problem, sometimes it is about doing new to make life better. Something people dont even imagine it.

    You dint know or dint feel that lycos was not upto the mark in terms of quality of result, does not mean that Google was not needed, Just that people dint realize it because they did not have another option.

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