How to Start a Business

What Kind of Misconception Startup Founders Often Got Trapped Into? [Starting a business 1]

SaaS Catch
February 9, 2024

1. Items and ideas

Look at the item(product) or service you're using right now. It's not just a product or service that I've used; it's an idea that I chose to change my situation. 

Most people don't distinguish between items and ideas.

"I can't leave because I don't have an item," "All I need is one good item and I'll quit.

These are all wrong.

A growing business always starts with a unique idea, not an item. It's important to come up with a specific product or service, but first you need to find an innovative idea and create a business model based on it. The most important role of a founder is to recognize the value of an idea and develop it.

What's the biggest difference between an item and an idea?

T.Levitt, professor at Harvard Business School, once said.

"Consumers need a quarter-inch hole, they don't want to buy a drill." 

(Refer to : What Customers Want from Your Products - HBS Working Knowledge )

We need to find a problem - a quarter-inch hole - and come up with an "idea" to drill the hole. A drill is one of the items to realize the idea - it doesn't even have to be a drill. If you don't realize this, you might be stuck developing a drill for three years just to drill a hole the size of a fingernail.

Summary of Marketing Myopia with 10 Examples: Theodore Levitt's seminal  work - SimpliMBA
(Source : SimpliMBA)

2. Problem solving and business ideas

Consumers prefer to solve their own problems in their own way. Here are three common problem situations they encounter.

(-) States are about discovering and solving problems.

A (+) state should make it easier, more comfortable, or faster to solve.

The (?) state needs to make them recognize that the way things have been so far is inconvenient.


Here's a simple example.

Consumers want to keep their homes clean. 

To solve the problem, they buy a broom (-), but it takes a long time and hurts their back. It helped clean, but the discomfort of the tool created a new pain point. 

So they buy (+) a vacuum cleaner, which is quick and doesn't hurt your back. 

Customers thought all their problems were resolved, but then they saw a robot vacuum cleaner that automatically cleaned for them, understanding that if they wanted to use the vacuum cleaner, they had to take the time to clean.

In the example above, the idea to solve the customer's problem of a "dirty house" is to "help them clean it up". What's important to note is that solving a problem requires a unique idea. A unique idea is to identify a hidden problem. The vacuum cleaner was able to solve the problem of brooms being "long and back-breaking," and the robot vacuum cleaner offered a new value of "time" saved by not having to manually use it.

When faced with a challenge like this, the item can be different depending on how you find the problem behind the situation and what ideas you come up with. This is what we call "value proposition", and it comes from ideas.  

How to increase the value of your idea:

- Recognize the state of affairs: find out what consumers want and why they want it.

- Problem recognition: Find the hidden problems in the situation they are trying to solve.

- Idea Approach: Find a way to solve both the situation and the hidden problem at the same time.

(Source : Unsplash)

3. How to come up with an idea

The first thing anyone who wishes to start a business needs is to find a problem.

Each founder has their own framework for finding problems and coming up with ideas. Think of it as your own set of rules, organized in advance, because it's hard to find problems if you're used to a given environment.

Here are six of the most common ways startup founders come up with ideas.  

1.Find and solve my own problem.

2.Actually test something that interests you.

3.Isolate the core functionality of an existing service and improve it by at least 2x.

4.Integrate something that is fragmented.

5.Anticipate the times.

6.Find the gaps in the idea.


Method 1. Find and solve my problem

As the title suggests, find your own problem and solve it. Resolve the problem from your own perspective without being swayed by other people's opinions, and then disclose your solution. See if your solution is valuable to others and evolve it.

- Snapchat: Worried about personal photos being leaked, the team created an app that automatically disappears after you post a photo.

- Airbnb: Started by recruiting others to solve the problem of paying for a place to stay.

(Source : Airbnb)

Method 2. Test your interests in the real world.

There's a big difference in perspective between when an interest remains a hobby and when it becomes a business.

If you don't actually meet consumers, it will remain a hobby. What you test can start as a simple curiosity or intuition, but it's how you need to build a prototype with very fast execution and find customers.

- Twitter: built a prototype in two weeks because they wanted to update my status and send it to my friends.

- Tinder: built it at a hackathon and it was well-received, so they continued with it.

Method 3. Isolate the core features of an existing service and improve it by more than 2 times.

In Korea, we often benchmark overseas services. Of course, the market environment and timing are important, but the most critical thing is to fix the problem that users are experiencing.

If you benchmark only items, it is difficult to find users. The key is to focus on the core problem that users are facing, the core solution, and improve only the core, so that you can figure out if the problem that others think is a real problem.

- Slack: built a messaging app by improving the interactivity of email.

- Wadiz: Recruited users around key features of crowdfunding.

- 3.3%: Started with a tax refund feature among many IRS tasks.

Method 4. Unify the disparate.

Sometimes customers need different tools for different situations. Maybe they're working on Webhard, then Excel, then they got lost in tons of items.

If users are spending more time searching for files than actual work, it's hard to tell that items are efficient. Consider bringing disparate functions together and see if customers can get at least twice as much done as before.

- Salesforce: Realized that unifying customer information from disparate channels like phone, email, text, and letters would help them manage their customers.

- Toss: Realized it would be useful for users to have a single point of contact for money transfers from multiple banks in the market.

- Skyscanner: Realized that many people find it difficult to compare the information provided by different airlines.

- CardGorilla: Found it useful to compare credit card terms, conditions, and benefits in one place.


(Source : Netflix)

Method 5. Try to anticipate the trend.

Although we cannot know the future, it is possible to anticipate the trend of the times from a long-term perspective by observing the behavioral characteristics of the generation, the investment direction of companies, and the changing perspectives of people in the industry, and prepare in advance. National support policies also change significantly every five years or so.

From online services to platforms, VR, and blockchain, think about what might be significantly altered in five years, like the current massive shift of artificial intelligence.

- Netflix: Started when they realized that video rentals were getting less and less while the internet was spreading.

- Upbit: Read the blockchain zeitgeist and created a bitcoin exchange.

- AI services: With the advent of ChatGPT, various services using generative AI are being created.

Method 6. Look for gaps in your idea

When a product or service grows, it's impossible to make it 100% for everyone. Even the big players always have something to improve. Aim for a very small market that the big guys don't cover, and start with the smallest market possible. You might be surprised to find customers in your neighborhood.

- Google Extensions: Google has great search, but it doesn't cater to a select few. You can customize your browser with Google extensions that cater to your specific needs.

- Winia: There have been a lot of refrigerators from major companies, but Winia released a refrigerator that can only store kimchi.

아크 브라우저의 Act 2 발표 영상 정리 | Disquiet*
(Source : Arc)

4. Why you can't just wait for ideas to come to you

Ideas don't come to you by accident, and certainly not by actively thinking about them, but most ideas arise from trying to solve a problem.

Whether it's curiosity, fixing a flaw, or pondering, you eventually have to take action. As you change the way you look at a problem and go through trial and error, the idea will eventually become clear.

The first step in starting a business is developing an idea. If your idea provides value to consumers and creates a solution, your business will build a solid foundation and thrive.

Next Post|Starting a business 2: Who and where are our customers?

Written by SaaSCatch (Link)

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SaaS Catch
SaaS Catch
For anyone who wants to start a business, here are the tools and methods to make your idea a reality. Learn about setting up and growing a business, including business frameworks, product selection, how-to's, business operations, maker stories, user interviews, and more.