The popular wisdom tells us that entrepreneurs need to love and have passion for whatever they’re doing. While that’s certainly a great and essential underpinning for any startup, there are a couple of other ingredients needed when trying to become the next great thing.
For the past week I’ve been talking to lots of startups that applied to our Nestholma startup program and made it to the interview round. Really interesting stuff and I can’t wait to get started working with them. Anyway, when talking with them, I thought about a lot about the qualities and aspirations of the candidates and what would make them successful. In the interviews we asked, among other things, why they want to be entrepreneurs and why the product they’re working on is so exciting. Building and running a startup is filled with so much uncertainty, so many nay-sayers combined with scarce resources (funding, people, time, etc.) that you absolutely need to have a passion for it to. However, that’s not enough.
Some time ago there was an excellent post by Michael Fertik in LinkedIn about finding your startup’s sweet spot from your personal point of view. He makes a good point about the need to find something you love and something you’re good at. Fertik advises that aspiring entrepreneurs should look for the overlapping area of the two and think about building the business around that. Excellent advice in the beginning, but to me it would seem that very soon the entrepreneur should start thinking about a third ingredient that’s actually even more important than these two. That is, what customers find valuable, want to use and pay for. Here’s my take on the startup sweet spot.
When you combine your passion and expertise, but don’t have customers, you end up with a hobby
First, think about the situation where you have a passion for something and you’re really good at something that is needed. For example, you have a passion for stamps and you are good at building ecommerce sites. Your idea could be to build the Amazon for stamps. Maybe there’s a great unmet need that you have discovered and can fulfill with your site? If not, it will turn into a hobby that may be fun for you, but there’s really no business to be build. Actually, when thinking about this, I finally understood why Steve Jobs and Apple have been talking about the Apple TV as their “hobby“: they can do it well, they love entertainment and TV, but they don’t know yet what is the product they should build ie. what the customers want.
When have a passion for something that others would like to use or buy, but don’t have any relevant expertise, you may be better off by becoming someone else’s customer
What about if you have a passion for something and you are certain that lots of others people have the same passion and need? The problem is that you don’t have any relevant expertise. For example, you have great passion for electric cars and think that there will be a great business around them in the future. However, without any engineering skills or in depth understanding about electric cars, the uphill battle may be too steep for you in such an industry. You may try to find the expertise, and buy your way into the new business. Still, you may be better off just to save up the money for the car done by someone else and enjoy it as a customer. Elon Musk has made the unthinkable and penetrated the fierce car industry with his Tesla Motors, but then again, he seems to poses phenomenal engineering and business skills.
When you’re good at something that customer like, but you don’t have a particular passion for it, you’re doing a 9-to-5 -job.
What about if you’re really good at something, and customers love what you produce, but you don’t really have a passion for it? Most working people in the world fall into this category. For example, you may be really good at writing code for enterprise backend systems, and your customers get a lot of value out of your work. If the pay is good, you may even work late nights. Still, thinking about new ways to improve, for example, the SAP and legacy system integration doesn’t keep you up at night and consume your free time. You’re happy to exchange your free time for the pay check, but you want to fill your free time with other activities and interests.
Sweet spot where startups should aim.
Now, when you combine these three things, passion, expertise, and customer demand, you arrive at the startup sweet spot. Most likely you’d start thinking about an idea in an area that you feel passionately about and combine that with some skill set or expertise that you have. However, in order to get closer to any meaningful business, you need to spend most of your time by learning what the customers really want to use and pay for and align everything else with that. As many startup advocates have said, startups are about learning what your business should be about. To me that learning is what makes working at and with startups so exciting. You get to discover what is your startup’s sweet spot and what opportunities it entails for your future business. If the connection with your customers is strong enough, you may have an actual business that you dreamt of when you started.
— Topi Järvinen (twitter.com/topij)
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