In Chapters 3-5, we will go through the journey from having an idea to creating a sustainable scalable business ready to have a global impact. We don’t mean that this is a recipe for guaranteed success. Every startup is unique and the right things to do are different. However, based on learnings from previously successful entrepreneurs, the presented ways of working and thinking can increase your chance of success.
A startup is a group of experiments – an iterative process trying to find a solution to a problem and a way to create a sustainable business around it. Here the process is described in chronological order, but in reality the phases often overlap and you can go back and forth.
Few successful startup stories are textbook examples. However, to find the best way of working for each unique situation, you need to understand the textbook examples first. That is what we want to provide here: the fundamental basics so that you can take them and be creative.
When you set out to create something new, you have to consider many different questions, such as who is your customer, how will you reach them, and how can you stand out from the competition. However the most fundamental question you should start with is this: what problem am I solving?
To build a sustainable business, you have to solve a repeatable problem that many people or businesses have – and that they are willing to pay for a solution for this problem.
Even though it’s possible to create hype and get people interested in a product that’s just a “cool thing”, if it doesn’t actually solve a real problem people will eventually stop using it. The same rule applies for intrapreneurs building a new product or venture inside a larger organization. An initiative is much more likely to succeed when it’s built around solving a problem.
Where to get started
But how can you find a real problem that someone has and validate that you have a problem worth solving?
One good way is to start with your own everyday life. You probably encounter problems or simply things that annoy you on any given day, whether at work, home, or school. For example, in a typical Nordic country this could be something like:
you have to wait a long time to get your food at lunch
taxis are expensive and never available when you need one
email is a slow and inefficient way to communicate at work
people are eating a lot of red meat even though it’s bad for the planet
you want to buy or sell an apartment, but real estate agent fees are high
In fact, some problems are so ingrained you probably don’t even think of them as problems any more. People might think this is just how things have to work.
There are also many problems that are not everyday things but can have a huge negative effect on someone’s life, like illnesses caused by rare diseases. Looking at the UN Sustainable Development Goals can also give a ready-made list of bigger problems in this world crying out for a solution. Things like:
Helping to educate people
Ensuring access to clean water
Making energy cleaner
Providing working sanitation
Cleaning up plastic waste from oceans
What are UN SDGs?
The UN Sustainable Development Goals (SDGs) are a set of 17 goals adopted by all United Nations Member States as a “universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.”
There are three key things you should keep in mind when trying to find a problem that needs solving:
1) Is it an important problem?
When you’re building a startup or a new product, it’s important that the business is built around a problem that you think is important. That’s why making money or becoming famous and respected shouldn’t be primarily motivators for an entrepreneur to start building a new business. Instead, you should spend time thinking about what gets you motivated and how you can build that around activities that you enjoy – regardless of financial success. Then at least you’ll be getting to work with something you like while (hopefully) also growing your business.
2) Is this something you like doing on a daily basis?
Another important point is to choose something that you enjoy doing on a daily basis. This is not to say that you will always get to do things that you like. On the contrary, while building a startup you will certainly face tasks that aren’t fun. But if the root problem you chose is important enough to you, it will help keep you motivated.
3) Do you have an understanding of the problem?
Most successful entrepreneurs have solved a problem that they encountered in their own life. When you have a personal relationship with the problem, it’s often easier for you to understand it, and you’re probably more motivated to solve it. How you are involved with the problem can of course vary and you don’t necessarily have to have in-depth experience. Having a personal relationship with the problem can also mean that a friend or family member has experienced it.
Insights from an Entrepreneur – Value Based Entrepreneurship
Johan Brand is a creative technology entrepreneur. He is the Co-Founder of Kahoot!, one of the world’s fastest-growing learning brands with over 70 million unique monthly active users in 200+ countries. Johan shares us the story of Kahoot & how he sees entrepreneurship.
How did you become an entrepreneur?
I began studying in a business school, but quit after three months. It felt like I wasn’t learning practical skills, just theory. This took me to art school studying photography to learn more creative skills, how to ask questions from the world and originate my own ideas.
At art school, I learned to deal with uncertainty and understanding things that have no given answers. This was also where I could vocalize my own taste and values. Critiques force you to defend your choices and can also answer your own questions of why. This is a skill I am so fortunate to have learned and find so much more relevant. At the time, I didn’t know I would become an entrepreneur but discovered my interest & talent in starting new things.
Story of Kahoot
When working in London, I got more and more interested in play as human behavior. I see it as our first language. It is what we do with animals or with other humans if we don’t have a common language. This is the entry into developing relationships.
At the time, I was introduced to the other founders of Kahoot. They were working on other projects, but we were all in a similar field. We connected through aligned views of the world. Our drive was coming together and seeing problems that needed to be solved. We brainstormed, challenged each other and fell in love with different ideas. In the end, we chose the best bits and pieces that fit our collective vision.
However, none of our ideas were so exciting that we would be willing to give up our careers. We started to think, for what are we ready to sacrifice everything – and then we realized that the problem with education needs to be solved.
The problem & solution
We wanted to make learning awesome and as fun as hanging out with your friends after school. To do this, there needs to be engagement, play, and social interaction.
We started to think about what does it mean: how can we make people engage more? Technology plays a big part in how both students and adults connect outside of work or the classroom. Now we just had to find a way how technology can enable learning to be cool. In school classrooms, we saw students using clunky, dated clickers to give answers. Why couldn’t we turn everyone’s smartphone into a personal gaming controller you always have with you? Our vision emerged to turn the outdated, boring classrooms into a game show with everyone’s phone being the controller.
The first step was to help the teachers get behind our idea. They needed to be the ones to introduce the game as something cool and then have their students log on to the platform. It’s no fun to be a teacher in your 40s with technology native students trying to do something with technology and fail.
We invented the pin code engage model. This means when the participants sign up, they will see their names on a big screen. Everyone wants to see their name on a big screen and get their 2 minutes of fame. This was our first innovation, creating a fun way to connect to the game which is actually a game itself.
Our research led us to quizzes as very engaging types of games that also work pedagogically. This entry point is the hook to have people to engage with the platform.
Customers and users
I think it’s important to understand that your customer might not be the user: you might create value for someone using the product, but someone else is actually paying.
At first, we defined our two users as students and teachers. Both need to have equal value, but both have different objectives. Teachers need to be able to facilitate the game and gain learning value while the students need to be able to participate in the game and gain social value. Our goal was to take both user needs into account, but have them somehow meet in the middle.
Turning the product into a business
It was clear we needed teachers to use the product. If their students love it, the teachers would use it again. This we coined, product-led growth. Once we created a product that the teacher would adopt and students would use, we gave it out for free to the end-users. If both the users adapted well, we used that leverage to sell the school administration on the value of this becoming a paid service.
However, it was very clear from day one that schools were just a laboratory for business. This product works on a basic, humanistic level for all. We opened our target groups to workplaces or social gatherings and now have found commercial growth as well.
At Kahoot, our goal is to ensure the product is always free for students and extract the value from businesses. I call it value-based entrepreneurship: you create solutions that add value before you extract value for yourself. Of course, I want people to have commercial success, but only as a consequence of having a positive impact. By giving, you also tend to get back – this is a fundamental attitude of a good entrepreneur.
A while ago I also founded a company called The EntrepreneurShipOne. I identified that the Ocean and its potential for a sustainable future was not part of the public agenda, neither at school or political level. I wanted to take action in solving that problem. We facilitate voyages and expeditions with entrepreneurs, politicians, and corporations to physically expose them to the problem and the solutions within technology and entrepreneurship that can provide solutions for the betterment of the world. At the moment, this is not a commercial business, but a community built on creating positive, societal impact. There could be a commercial element to draw from this venture at some point, but first, we should have a positive impact.