Finding versus Building

If I look at the last six early-stage companies I have worked with, there has been a consistent pattern around how the companies built their initial offering:

#1 An S/I was hired to build software for consolidating financial information and then commercialized the solution. 

#2 A professor took an innovative method from academia for “choice modeling” and applied it to the retail industry.    

#3 An entrepreneur had a fast and cost-effective way to gather consumer feedback around music, and then pivoted to leveraging the platform for merchandising.

#4 A product manager for auditing tools decided that a Machine Learning based solution would be more thorough and founded a company.

#5 An established ISV, with a cross-industry solution, implemented their solution in a particular vertical and then branched out with a dedicated solution for that vertical.

#6. A scientist continually ran into constraints when performing earth observation data calculations and then developed a suite of tools to mimic performing those calculations as if on a local configuration but with the limitless resources of the Cloud.

In each of these cases, the founder either directly experienced the problem, was hired to solve a problem, or thought a known approach or technology would be good at solving a problem.  Furthermore, after developing their initial offering, each of these companies looked to expand by finding organizations who had a similar problem.   

Last week I was listening to a podcast from Scott Gallaway, Prof G on Marketing, https://open.spotify.com/episode/1fh0q2e1Ikyin29oyG2VSk?si=f8RKPvOEQwmw60tAJHHDAQ, when something he said made me stop and hit the back button – three times!  “Marketing isn’t finding consumers for your product, it is figuring out what market you want to go after and then reverse engineering…”

In thinking about how Prof G defined marketing, I realized that I had spent the last fifteen years finding.  Finding organizations who fit a specific profile for the problem we solved (Ideal Customer Profile – ICP).  This approach often led to two challenges.  First, we needed to knock on a lot of doors to find the subset of prospects that fit our profile as our ICP didn’t naturally match an already defined segment.  Second, our offering solved a problem or problems, but didn’t address the overall process.

 Yes, we found work arounds and had success but would our growth have been much faster if we had started by defining the markets we wanted to serve versus finding customers for the problems we solved? Well, there is always #7…