Plenty of side hustles and businesses become lucrative because they fix an unsolved problem, or improve something that already exists.
If that seems easier said than done, there’s a simple solution: Study people who’ve fixed other unsolved problems before, self-made millionaire and RSE Ventures CEO Matt Higgins said at the CNBC Make It: Your Money virtual event last week.
“We all have within us a proprietary insight about how something can be done just a little bit better,” Higgins said, adding: “The vast majority of game-changing businesses are actually built on [those] insights.”
Higgins pointed to one particular billionaire as an example: Airbnb CEO Brian Chesky, who accidentally co-founded his company while brainstorming ways to pay rent in 2007. Chesky and one of his co-founders booked out air mattresses to strangers who were in San Francisco for a design conference.
By solving a personal problem, realized they had a viable business idea. As a bonus, they solved someone else’s problem too: Travelers could stay in more affordable accommodations than hotels.
Airbnbs may not always be the least expensive option anymore — but the company has a market capitalization of $77.04 billion, as of Wednesday afternoon, and helped launch the modern sharing economy alongside companies like Uber.
In other words, you don’t necessarily need to invent a new product to be successful. Pay attention to your surroundings, and ask yourself if your solutions to everyday problems are replicable, Higgins said.
A common entrepreneurial theme
Chesky isn’t the only example worth studying: Plenty of other successful companies were created in a similar way. Bumble CEO Whitney Wolfe Herd launched her dating app, in which women initiate all conversations with matches, after spotting a common frustration in people around her.
“I saw a problem I wanted to help solve,” she wrote in a 2020 letter on Bumble’s website. “So many of the smart, wonderful women in my life were still waiting around for men to ask them out … For all the advances women had been making in workplaces and corridors of power, the gender dynamics of dating and romance still seemed so outdated.”
The tactic works for smaller businesses, too. Gordon Ramsay-backed cookware brand Hexclad was founded because two co-workers thought they could make a better-looking and more durable frying pan. CEO Danny Winer told Make It last month.
Tech marketplace Whop, which brings in an estimated $354,000 a month, was born from a group of young friends realizing a different software marketplace was unreliable, co-founder Steven Schwartz told Make It in August.
Mentally reframing your goal from “create something brilliant” to “solve a problem” can help a lot, according to Chesky himself.
“If we tried to think of a good idea, we wouldn’t have been able to think of a good idea at all. You just have to have a solution for a problem in your own life,” he reportedly said during a 2015 talk at New York University.
Meta CEO and co-founder Mark Zuckerberg agrees, saying in a 2016 interview with Sam Altman — then the president of startup accelerator Y Combinator, now the CEO of ChatGPT-maker OpenAI — that most Silicon Valley founders build companies “backward.”
“People often decide that they want to start a company before they even decide what they want to do,” Zuckerberg said. “The best companies that get built are things that are trying to drive some kind of social change, even if it’s just local in one place.”
Source: CNBC
