In my opinion, real pain points for most people do not include a new user interface for Facebook, a new programming platform for app development, or a new size smart phone. So why do I see some many funding requests for products along these lines?
As an alternative, if you are an entrepreneur looking for the next big thing, where should you look? Here are some key drivers that will likely lead you to a fundable idea:
- A business crisis. The impact of the current pandemic on small businesses and staffing is causing us all pain, and forcing new ways of thinking. Maybe we haven’t seen the results yet, but there are thousands of startup opportunities to offer new alternatives and services, to replace those destroyed by the crisis.
- Some kind of natural or man-made disaster. The hurricanes in the Gulf, the wildfires in California, and the monsoon floods around the world, all suggest that real opportunities for change are needed in climate control, forest management, and building design. Usually, people pay to relieve pain before buying luxury items.
- When the world gets smaller. When globalization or technology shrinks distances (Internet), painful missing needs become evident, and opportunities abound. Other countries can provide e-commerce with different business models, outsource manufacturing at low cost, and a huge market for new products.
- The impact of global instability. Unpredictable forces, such as unrest in the Middle East and China, can quickly change energy cost equations, or availability of critical products. Many of the current opportunities in alternative energy are the result of these forces, as well as the lack of effective government coalitions to conserve other resources.
- Truly “disruptive” technologies. I hear this term every day, wrongly applied to new social media site, or a new productivity tool. I’m looking for things like the next Internet, nuclear batteries, or a technology to cure cancer. Recent “paradigm shift” technologies, like the new electric vehicles, still spawn major opportunities.
Of course, there are caveats to every opportunity. Many of the biggest and most obvious ones have non-business and non-technical hurdles, including the following:
- Government regulations. New medical initiatives and new energy alternative technologies can be delayed or bogged down for years by existing bureaucracies and irrelevant political agendas.
- Existing infrastructure. Companies with huge existing installed bases and infrastructures, such as oil companies or auto manufacturers, often present major roadblocks to the implementation of alternative solutions outside their control.
- People are slow to accept change. Change is hard for most people. Therefore, it takes time, sometimes whole generations, of education, communication, and incremental proof to get momentum going and overcome old fears.