The most fundamental principle for startup success


It bothers me how there is so much dogma going around on how to effectively build your startup. The latest was Paul Graham’s essay on how you should only work on organic problems.

Although I love his essays, this particular one inspired me to think about the principles around picking the right problem to solve, because I don’t think its simply about “my problem” vs. “others.”

While thinking through this in a principled way, I think I came across what I believe is the most fundamental principle for any business (including startups). The principle is: Focus on problems you can understand.

The goal of a startup

To get to this principle, I started with defining what the goal of any startup is.

The goal of any business, including startups is simple: Profit by providing a valuable solution to a problem.

If profit is not your goal, you are not running a business, you are running a charity, or even worse, a business doomed for failure.

Picking whether you should solve a problem that is organic vs. someone else’s problem is part of the design that achieves your goal. Similarly, Business models (Freemium, Free, Paid), Funding options (VC/Angel/Bootstrap), Platform choices, Distribution strategies (walled garden/open integration) are all other options that feed into your design.

Focus on problems you can understand

Now, to achieve your goal of Profit, there are a number of things you have to define in your design.

The most important thing that people back into without realizing it as they define the design is “the idea.” With luck, just focusing on the idea works for some, but as we all know, most businesses just fail since people are so focused on the solution a.k.a “the idea.”

Keeping the the most fundamental principle, if I were to create my business in a principled fashion, the most important thing for me to do would be to choose a problem I already understand or I can figure out how to understand.

Thinking about it at this level opens up a world of clarity and more importantly a world of possibilities for my startup to make profit.

For example, I don’t quite understand all the problems CEOs face, but I could easily talk to 30 of my CEO friends and get a threshold level of understanding of what their problems are. If I can do that, then I can most certainly pick one of those problems and solution it.

As you can see, it is not just about “scratching your own itch”, or picking “organic problems,” or just about attacking problems others may have. This is why Paul’s essay came off as too… specific to me, too dogmatic even.