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The Two Types of Problems Founders Set Out To Solve When Starting A Company

The Two Types of Problems Founders Set Out To Solve When Starting A Company

I’m a big believer that founders shouldn’t just start companies to start companies. They should start companies because they want to solve a very specific problem. The “this will make us billions” type of entrepreneurs rarely work out. Entrepreneurship constantly kicks the shit out of you everyday for at least a four to five year period. If you’re not solving a problem you deeply care about, then you’re likely to quit through the death of a thousand cuts. You won’t have the ability to hire, the product will get messy, and the list goes on. If it’s not a problem you want solved, then it just won’t work. When thinking about this concept, I thought that there are really two different type of problems founders solve.

The first type of problem is what I call a “Domain Expertise Problem”. It’s a problem that you’ve experienced and identified due to some domain expertise you have. It could be domain expertise from working at a big company and realizing X was a huge pain point. It could also be domain expertise from hobbies that you have and you realize that a better product needs to exist in the market. Domain expertise problems are ones that you have a deep understanding of through some first person pain. When starting Onswipe, I had developed some domain expertise as a writer, and wanted to make my content more enjoyable on mobile. When starting eBay, there’s always the famous story that Pierre just wanted an easy way to sell a Pez Dispenser. The list goes on and on.

The second type of problem is what I call a “Thesis Problem”. They’re problems that you may not have experienced through your professional or personal life, but it’s a problem you have to see solved. It’s the equivalent of a graduate thesis, where you are obsessed with the space and have to see it solved. Google is an example of this problem. The founders weren’t going crazy over how bad Altavista was, but it was more of a technical and research problem they wanted to solve. They realized it was a big problem, had a thesis around it, and became obsessed with the problem. You could call Tesla a thesis problem in many ways. Elon didn’t have domain expertise in cars and could have lived fine without an electric car, but it was a problem he wanted to solve. It was a problem that he became obsessed with and wanted to solve with a product.

The underlying theme on both types of problems is obsession. A founder has to find a problem they become obsessed with. Until you find something you can obsess with for a decade, it’s likely not the right company for you to start.