The first image that comes to mind when people think of successful startups is most likely those enterprises that resolve some of the most serious problems the world faces today – transportation, medicine, finances, or communications. Though the majority of successful startup companies target these enormous markets, some of the most intriguing stories of entrepreneurial triumph originate from businesses that addressed issues the average person had no idea he/she had.
These concepts at first appear bizarre, superfluous or even ridiculous. Countless investors, customers and geniuses of the industry initially discard them. However, years later, few of these start-ups become very profitable business as they detect invisible pressures suffered by millions of people.
In reality, breakthrough innovation doesn’t just happen to address colossal and glaring problems. The greatest opportunities are often hidden in minor irritants we experience all the time, but are too insignificant to get the attention they deserve.
Everywhere in the startup world there are entrepreneurs who stumbled across odd problems, devised ingenious solutions, and generated vibrant companies around needs so esoteric that no one else even saw them. As their stories of success show, this is not always the case for the best business ideas.
Why Hidden Problems Create Massive Opportunities
The key point is Entrepreneurs are after huge markets. They look for billion dollar opportunities and they try to compete in heavily contested markets. Of course this can work but it could also be too competitive and costly with regards to customer acquisition.
There is another way-problems that aren’t immediately visible.
A second reason a startup can be so successful is that if the startup has addressed a problem that has been previously neglected, success can often be achieved in a market where there is a complete lack of competition. Rather than competing directly with existing competitors, entrepreneurs have the opportunity to create new markets altogether.
Various little issues are present for certain minority audiences. The seemingly small audiences can sometimes turn out to be bigger markets than initially thought. Once you have something working, some crowd marketing can catapult you, your business, or your niche because of happy people that finally have a solution.
A next advantage is the customer loyalty. The people who has annoyances on a permanent basis, are sometimes willing to pay for a solution that will help them.
This is the skill that distinguishes many entrepreneurs who succeed in the business world.
The Power of Observation
Observation rather than invention is the starting point for most of the most successful startups.
Great founders observe peoples ‘behavior, pain points and frustrations from their daily life. They ask questions that others might not think to ask.
- I mean, why is it so hard to do this?
- So why has no one figured this out?
- Why people keep accepting that inconvenience?
From simple questions come extraordinary discoveries!
A great number of startup founders did not dream about starting a company; the fact that they were personally frustrated led them to invent a solution for themselves. Eventually, they found out that 1000, or even 1 million, other people have the same problem.
This cycle has been repeated again and again in the history of startups.
When Small Problems Become Billion-Dollar Businesses
Numerous current concerns are focused on topics that first appeared insignificant.
For instance, the traditional means of finding a semi-decent ride-calling a taxi-was often a hassle. Who would have thought that such an inconvenience would breed whole billion-dollar industries?
The founders of food delivery came out of another unsung challenge. Consumers desired good food in the comfort of their homes without dialing telephone numbers and trekking to restaurants. While this may not have seemed like a revolutionary issue at the time, solving it undoubtedly was.
The equation is analogous for many startups. Entrepreneurs spot pain points, refine the experience and iterate to transform entire industries.
The simple lesson is this: you don’t always need extreme solutions. Sometimes just making the world a little more comfortable is enough.
Startups Built Around Surprisingly Specific Problems
Here’s a particularly fascinating trend: the emergence of ultra specialized startups.
There are companies that help pet owners keep an eye on their pets when they are away. There are companies that help people organize digital pictures, keep track of subscriptions, remember passwords, or find lost items.
You may think they’re small problems, and compared to others they are. Many people experience similar small frustrations day in and day out.
Think of the forgotten online subscription problem. Consumers can easily continue to pay for something they don’t use anymore because they forget about what they are paying for. Founders saw this problem and created solutions to improve billing management.
Digital clutter watched an explosion in growth, as people began to collect tens of thousands of files, photos, and messages. Entrepreneurs focused on organizing and productivity sensed a developing need to get rid of the clutter.
These examples show you how niche frustrations can be turned into real business opportunities.
How Technology Makes Unusual Startups Possible
Technology has opened up a wide band of problem solving opportunities that an entrepreneur can tackle.
In earlier generations many niche markets were too small to sustain commercial businesses. About three decades ago it took expensive advertising, storefronts and large distribution chains in order to attract clients.
Today internet makes startup’s reach very specific niche audiences worldwide.
A founder addressing a singular problem doesn’t require millions of local customers. They can now reach thousands across the globe who face the same obstacle.
Artificial intelligence, cloud computing, automation and mobile apps have also reduced the barriers for entry. Entrepreneurs are now able to create a potential solution in no time and to experiment on a brand new idea with few resources.
This paradigm shift has inspired entrepreneurs seeking out opportunities that previously could not exist.
Why Investors Sometimes Miss Great Ideas
One other interesting thing about hidden-problem startups is that investors are usually full of underestimate the such kind of enterprises.
If the business idea is out of the ordinary investors might not see the potential market opportunity. They could imagine the need is to niche, or the customer base would be very limited.
As history demonstrates, it can be a mistake to assume in this way.
Some of the more successful startups, were initially dismissed because their markets seemed irrelevant. People saw what the business was, and not what it was capable of.
The problem with hidden problems though, is that they are hard to quantify. For example, conventional market research typically is less able to identify unmet demand because customers have become accustomed to the inconvenience.
As soon as a start-up offers a good solution, this can be very quickly established.
This is the need for founder conviction to desire to overcome conviction. Need for founders who really understand the product character of the problem and be willing to develop a product for it.
The Psychology Behind Overlooked Problems
It is largely due to the involvement of humans that many problems have remained unresolved.
One of the eye-opening aspects was that people tend to accommodate frustrations rather than proactively find solutions to their problems. Over extended period of time, ‘annoying’ issues become a part of consumers’ regular day-to-day life.
For instance, consumers may have endured years of an inefficient process just because they had no alternative. They will give up on asking ‘is there a better way?’
Those entrepreneurs who question these assumptions and dispel these myths will seek outland discover opportunities.
Most successful entrepreneurs see daily life through a new lens. They don’t sit around accepting the status quo. They wonder why it is the way it is and if we can make it better.
Enabling them to recognize prospects that might otherwise be overlooked.
The Rise of Hyper-Niche Entrepreneurship
Current entrepreneurs are heading towards further segmented markets.
Many startups instead of trying to appeal to everyone tend to address a precise use case for very well defined users.
A company could decide to develop a product just for wedding photographers, for example, or just for restaurateurs, teachers, Pilates instructors or freelancers. The numbers for these markets are pretty small if you look at a local level but they are often pretty huge if you look at the whole world.
Pure-niche startups can scale fast because they provide solutions that bigger companies are not offering.
Clients favor products targeted to their circumstances more than the one-size-fits-all approach meant to fit all.
According to deeper analysis by the authors, as technology advances hyper-specialized business will proliferate even further.
What Entrepreneurs Can Learn From These Startups
The success of two startups to resolve unforeseen situation provides lessons we can learn from.
It is first and foremost by paying attention to their own frustrations that entrepreneurs can discover new opportunities. Lifelong aggravations can indicate a huge market.
Secondly, bizarre insights need not be dismissed as the devastatingly trivial. A significant proportion of successful firms started by addressing niche issues.
Third, asking the customer and getting feedback can be more important than assuming things. Something that means nothing to one customer may be a big issue for another.
Another lesson is persistence. Many less traditional startups face doubts about their early stages. Entrepreneurs should keep going no matter what people say.
More than anything, entrepreneurs should remember not all innovations have to be based on breakthrough innovations. Sometimes, change can be making the simple things better.
The Future of Hidden-Problem Startups
There is a promising future for startups with unmet needs.
As our society continues to shift towards digitization, new forms of inconvenience are constantly arising. More information, more subscriptions, more devices and more interactions are taken on by individuals.
A lot of opportunities follows from this.
Using artificial intelligence will provide an even bigger incentive for this trend to develop, by enabling an easier way for us to spot patterns, automate and make the offer more personal.
Environmental change, aging populations, telecommuting and digital revolution have resulted in new challenges for entrepreneurs to handle.
A number of the most highly successful new companies of the next decade may end up being whatever seemed to matter least. Today.
Why the Best Startup Ideas Often Sound Strange
A common feature of many great startups is that they sounded strange at first.
Humans are generally not accepting of new solutions from other individuals, others tend to compare them to the current solutions. If the problem is not solved for many years, others think there is no other way to resolve it.
Innovator. Entrepreneurs are not conventional.
They identify opportunities where someone else would just see a to-do list. They challenge assumptions.
Therefore, at first, their proposed thoughts may seem farfetched. However, these ideas may later change the world’s industries and the way people behave.
This is one reason why some of the best new business opportunities in the world come from the problems that no one thought there was a problem.
Conclusion
Startups that address problems people didn’t even realize they had showcase how keen observation, imagination and inquisitiveness can lead to innovative solutions. Instead of seizing upon the most apparent market space, these founders discover frustrations that went unnoticed and craft products that enrich daily existence.
Those success stories show us that it’s not always about solving the world’s greatest problems. Actually, sometimes it’s about seeing what most people are ignoring.
Just as technology keeps progressing and providing us with new kinds of inconveniences, there will be more chance for what I call the hidden problem startup. Perhaps the blockbuster billion-dollar startup of the future will have nothing to do with an enormous problem in the world. It will just make life easier and better in way that no one ever thought of.
This point is crucial to the entrepreneurs. The little frustrations you see around you might be the huge business opportunity that everyone is looking for.
FAQs
What are hidden-problem startups?
A hidden-problem startup is one that attempts to make a segment of customers lives easier or more pleasant by solving an overlooked problem/annoyance.
So why is it that extraordinary startup ideas keep on working?
They typically encounter fewer rivals and tackle authentic customer complaints neglected by their competitors.
Is it possible that a very minor problem can turn into a major business venture?
Yes. Many top-performing companies on accomplished solving small problems that later impacted millions of lives.
In what way do entrepreneurs spot gaps?
From personal experiential knowledge as well as stimulation by life-repeated observation, talking with customers and thinking about how my customers spend there time.
And the question is are investors in sense of funding interested in niche startups?
Founders can often convince most investors, these days.
What kinds of business are a hidden-problem startup possible in?
Technology, health care, education, productivity, sustainability, finance and consumer services-all these areas provide avenues to address neglected problem.
