Business planning

Why startups should focus on the experience not the problem

StartupSmart /

 

Most startup pitches dedicate a slide to the problem they are solving.

 

They seek to explain how painful the problem is, or how big and broad a problem is. But what problem are you really solving here?

 

I’m not sure the problem perspective is the right one. When assessing startup investments I think more about the delta to the existing experience – creating a new experience.

 

Amazon is a fun example. Before they arrived, the existing experience was to travel to your local neighbourhood bookstore. They would only hold five to 15,000 books at a time.

 

The existing experience for the more popular books was pretty good. A bookstore offered a place to step out of your day. Browse. Enjoy a brew. People-watch. And book prices were most likely low relative to your discretionary income – most store locations were relatively convenient.

 

The experience wasn’t always that great though. You had to search for the book on their shelves and sometimes disappointment awaited. Then you had to tell a judging stranger about your obscure interest. Then order it without getting to see and feel it, then wait, then come back to pick it up.

 

In 1995, Amazon arrived. Even in its early days, the delta to the existing experience was large.

 

You could search or browse hundreds of thousands of books. You could pull up every book by an author. You could browse the most popular books of any category. Instead of recommended retail prices, Amazon discounted prices.

 

That was 20 years ago and along the way the delta to the existing experience has increased.

 

With the Kindle you can download any book you want in less than 60 seconds and at your own leisure read the first chapter before deciding to buy. You can’t do that in a bookstore.

 

These features were becoming more of a new experience as opposed to a better version of the existing experience. Shopping for books had changed.

 

For 20 years Amazon has been improving on the existing experience and trying to create new ones.

 

Another example is Uber with transportation. We’ve always been able to hail a cab. But it’s clear after using Uber that they have taken a poor existing experience and transformed it.

 

Perhaps startup pitches would be better to map the existing experience and the delta to the new experience.

 

It’s not so much about finding a problem as about articulating the existing experience versus a new one.

 

There’s a rule of thumb that this delta should be 10 times better or don’t bother.

 

If it is a much better experience or a compelling new experience, people will talk about it. And that solves the next gating problem for startups: getting the word out.

 

Paul Bennetts is a VC at AirTree Ventures. This article was originally published on Paul Bennett’s site.

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