Why startups fall into the SISP trap
A few months back, I was mulling over the idea of whether to apply my startup to Y Combinator. Perusing through their website, I came across an interesting video done by Jared Friedman as part of the YC Startup School. In the 20-minute-long video, Friedman introduced an interesting concept, something I feel that most startups would need to pay heed to.
The concept centered around people looking for ideas to solve for. While doing so, they find themselves in situations where they begin building something (whether code or no code). Friedman coined the term SISP — Solution in search of a problem. Sure, these individuals would have started building solutions on the basis of them facing problems. Or perhaps even a small set of individuals facing these problems. However, when extrapolated to a larger set of users, these problems simply do not exist.
I’ve come across several startups that have fallen into this trap. In fact, most startups around seem to fall into the ‘building trap’ where they build with the hope that someone will be interested. For me, this has only ever worked in Kevin Costner’s movie ‘Field of Dreams.’
So, after their ‘Field of Dreams’ SISP fails, most entrepreneurs go back to the drawing board, looking for new ventures to start. Why does this happen? And is there a way for new entrepreneurs to avoid this trap? More importantly, can this be a way for potential investors to weed out startups with little or no potential (apart from groundbreaking technology)? And, would there also be a way for would-be entrepreneurs to look at ways to validate their ideas before raising funds?
These are my thoughts on how startups can avoid the pitfalls of the SISP and how investors and startups can look to qualify startups and bring an end to the ‘funding winter.’
- Spend quality time researching — Most pitch decks I receive from early-stage founders have things like TAM, SAM, SOM, etc. These are very good insights and are mandatory for every pitch deck. However, this level of secondary research is only a small part of the research required. The fallacy with secondary research is that it considers the entire market and includes aspects that are far away from what your application actually solves.
Therefore, it is important to understand that while secondary research can help build hypothetical models, primary research is what will ensure your idea is validated. - Focus on Primary research — Having touched upon this a little in the previous point, I’d like to dive a little deeper now. Primary research should ideally constitute 80% of all research a startup should do. This research involves actually speaking with potential clientele. There are several ways one can go about doing this. For B2C products, Google Forms or running polls would suffice. For B2B, focus group discussions or one-on-one interviews would be better.
With more interviews, patterns begin to emerge and this can be used to inform the features your product needs to have. Moreover, should one look at the building for the people surveyed, they would already have their first prospective customers.
Ather Energy is perhaps the best example of this. While EVs were coming to India, Ather prioritized interviewing all stakeholders before actually launching the product. You can watch the video here.
Although this post touches on research being the most efficient way of avoiding the SISP pitfall, there are certainly many more. However, for early-stage startups, primary research can not only help with product validation but also acquire early customers.
