Successful companies take a “pain” away from their customers. But how do you find the problem that causes that pain and how do you translate this into a business idea? In this article we look at pitfalls, tips and tricks from the experiences of Holland Startup. Supported by the practice at the brand new startup Localpepper, which managed to reduce his broad interest to a concrete and promising idea.
The great success of Instagram is well known. That the founders struggled with their product in the beginning is often less so. The initial idea – a fully social medium, of which photography was only a part – was expanded, framed and turned upside down several times. Jumping back and forth between old and new ideas. To eventually arrive at the iPhone app that made Instagram great.
It indicates that the path to a successful idea is far from linear. However, with a process-based approach you can provide the necessary grip, says Els de Jong, Startup & Growth Mentor at venture builder Holland Startup. Ideation, as the process of finding your business idea is called, is mainly about retrieving information and processing it in a structured way in order to be able to adjust ideas in a short time. “The problem people start with is rarely the problem they actually solve. It is constantly changing through contact with customers.”
At the start of the ideation process, founders at Holland Startup therefore keep a problem book in which they record the problems they encounter. In their daily lives, the news or otherwise. To start problem-oriented thinking.
The two entrepreneurs behind Localpepper, which was in the ideation phase last February, also did this. “In a week's time we wrote down about thirty problems”, says co-founder Thomas Rijpma. “We both saw about five of them as a good contender to solve, so we continued with that.”
The fact that Rijpma has a background in Life Sciences and his co-founder in Finance, combined with an interest in sustainability, ensured that the topic of urban and indoor farming was brought up. With the problem that this is still expensive for consumers to apply. With that idea and a few others, the two set out to meet people who are involved in urban farming. “Due to the interviews about what they encountered, we always did small pivots in the problem that we found interesting. For example, we switched from urban farming to local sourcing from caterers. It turned out that caterers see it as a problem, but also already have solutions. The pain is more with small-scale producers. They see the growing demand from consumers, but no longer earn from it because the market is determined by large players.”
Through some further intermediate steps, it eventually led to Localpepper helping restaurant chefs easily discover local and seasonal products.
big and specific
The fact that there is no clinging to one problem at the start is particularly valuable, says De Jong. It is precisely by investigating several problems at the same time that it becomes clear which problem has the greatest potential for a company. The use of a Lean Canvas, on which, among other things, problem, solution, customer, added value and income streams are listed, provides quick insight. “You validate your ideas with it and you learn to prioritize well.”
It is also important that subjects are viewed from different perspectives. This is one of the reasons that Holland Startup works with entrepreneurial duos. Because founders have different backgrounds, they can work together to arrive at new insights.
Another condition, according to De Jong, is that entrepreneurs must have a great, sincere interest in the subject. “You have to address both the problem and the customer group, because you are going to build a company around it, which requires a lot of effort and perseverance.”
In addition, it is examined from an investor perspective whether a problem is large enough and specific enough to develop a successful company for it. For example, 'Horeca' is too broad, but 'caterers with owners between 25 and 40 years old, who operate for 50+ customers a year' can provide enough direction, De Jong outlines.
Finding problems has some important pitfalls. People tend to think in terms of solutions, says De Jong. According to her, it is advisable to avoid thinking back from a solution to a problem. The startup coach also notices that starters often write down problems that they experience themselves, so that they are so convinced that answers that customers give in interviews are 'bent' towards this problem. “Too often someone is looking for confirmation of their own assumptions. You can prevent this with the right questions.” The latter is therefore one of the points on which Holland Startup coaches starting entrepreneurs. As well as framing and making problems tangible, efficiently keeping track of the process and how you can be critical of the solutions you come up with.
A lot happens at once in the initial phase, says Rijpma, who calls it the most challenging phase to date. “The whole world is open to you. You look at all the issues that interest you while simultaneously exploring the collaboration with your cofounder and learning about the way of working. This requires good prioritization and rapid experimentation. Which is also valuable as we continue to build our company.”
Would you like to know more about starting with Holland Startup? Come to our free webinar Meet Holland Startup!