Solving Real Problems

The majority of the deals I look at, I do so as a partner at Montreal Start Up. Because of our investment focus these deals tend to be overwhelmingly in the Web space with a few Mobile plays thrown in for good measure. I also look at deals for Anges Quebec from time to time and as part of the selection committees for Capital Innovation and the Montreal section of the Concours québécois en entrepreneuriat. As dynamic as the local Web scene is these days, the engineer in me is attracted to these non-Web ventures for the simple reason that they are tackling real problems. Too many Web start-ups are still either me-too’s (an N-th copy of, or variation on, a popular service) or yet-another-way-to-waste-time-at-work.

I think the problem is related to experience. Most of the non-Web projects I see follow one of two patterns. Either they were instigated by people who worked in a sector for years, grew tired of its inefficiencies and decided to do something about it, or they are the result of researchers spending years trying to solve a hard problem. In both cases, the entrepreneurs are people who have invested years gaining a deep understanding of a sector, a problem and its potential solutions. Many Web entrepreneurs don’t have any real domain expertise beyond software development. That’s fine if you want to build tools and services for developers, but otherwise you are going to have a hard time identifying a real problem to start working on.

Sadly, I don’t think the currently popular Customer Development model is of any use here. It will help you validate and refine your ideas, but first you need to pick a  problem space to tackle, i.e. do I want to fight identity theft or build a service that will speed goods through customs?

Solving big problems is important because that is one way we make the world a better place. Also, from an investor’s perspective, the potential rewards are greater.  So the question we need to be asking ourselves is, how can we help smart, motivated people who want to start Web businesses identify real problems to tackle?

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