The Story of Hammer and Nail (and Startups)
In the last 15 days, I have seen close to 85 business plans and while some of them were mind blowing, majority fall under the ‘Hammer and Nail’ syndrome.
Hammer and Nail is a classic syndrome where hammer just looks for a nail. In essence, once you have the hammer, everything looks like a nail!
To cut the long story short, Hammer is the ‘solution’ and Nail is the ‘problem statement’.
Hammer and Nail - Made for each other?
Nail needs to be ‘nailed’, but is hammer the only option? Maybe yes, maybe not. How advisable is it to have a solution (i.e. hammer) without knowing the exact nail (i.e problem statement)?
Logically it seems like an insane act, but in reality this is what many startups go through.
Sometimes, startups (especially the geeky ones) are so much governed by ‘I have a solution’ mindset that they tend to not look at the problem statement in it’s entirety. They are obsessed with ‘only my solution’ can solve the problem, while they fail to realize the difference between alternatives and substitutes that are present for any solution (read:Substitutes vs. Alternatives – Understand your Competition Better).
They fail to see the usefulness of their solution vis-a-vis the problem statement and instead, start building problem hypothesis based on their solution.
For instance, if you are an embedded systems geek, you will want to build a product in your technology domain. But do you realize that building a business is a different ball game vis-a-vis building a product? Do you know what will it take to really build an electronics consumer company?
Maybe yes, but in reality you are still so obsessed with your ‘embedded systems’ background, that the operational/marketing challenges of running an electronics consumer company isn’t something you have even thought of.
And that’s a fail.
The question to answer here is – ‘What Business problem I am solving’. Do I really need a hammer to ‘nail’ the ‘nail’? OR that’s a ‘screw up’ (metaphorically!)
Geekies – stand up and answer this question. Please come out of your “I am from <X> background and will do only X++”. Come out of your comfort zone and once you have answered the earlier question, answer a difficult one – ‘What Business am I In’?
What’s your take?
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Mr. Sinha,
Why is it always necessary for business to ‘solve problem’, sometimes it might be ‘I can solve problem in better way’ OR ‘Soultions, show that there was problem, which was never realized, and now we have already solved it’
@ rishir ur point only means using a heavier hammer or one’s own ass to finally punch the nail into the fora … lolz.
Being an Embedded software geek myself, I can totally relate to the situation described. Techies do tend to live in a bubble …. well, atleast most of us, the remaining are gifted
.
It takes tremendous focus and even discipline to evaluate a business idea from a non-technical perspective.
That’s why while Ashish has seen 85 BPs, I have discarded atleast 10 of mine
Ashish – this is a very good and small post on the basic challenge that many startups encounter and fail at. One hears constantly of “pain points” to address but almost 1 in a 1000 is actually creating value for the end user.
Incidentally I just finished reading a post on Steve Jobs where someone describes him as the World’s best end user – I couldnt think of a better way to epitomise the person.
I also relate strongly to the “business problem” question. A lot of techies get into the hardcore technology aspects without thinking the business basics. That might work in a few cases, but the ultimate goal IS ALWAYS making money IMHO.
I will put it in this way: Instead of selling your products to customers, sell customers products they are looking for. Notice that customer always comes first in the equation.
This the very reason i do not prefer ‘business plans’. This whole ‘business plan’ business assume startups as predictable and rational activity with well defined milestones and end points which they are not. I assume this is why MBA’s school, incubators and institutionalized entrepreneurship do not deliver.
You can make a plan for mom-n-pop corner store but real entreneurship is all about learning, flexibility and persistence. Core activity of venture is to experiment and learn. This is where risk is involved. Rational mind try to control this very activity and kill the essence of startups existence.
Coming to ‘What Business am I In’ part. I think this is wrong question for a startup to answer. I believe if any our model startup have tried answering thins we would never have a Microsoft, Google, twitter. Can anyone answer in what business google is today? technology or media? What about twitter?
Even if got a reliable answer to it how it help me anyway? Twitter is is communication business? But there is no since communication technology company who made money. Did Microsoft ever able to get ROI from 400 million they paid for Hotmail? Does any one make money from IM’s?. I doubt.
They say premature optimization is the root of all evil. Any attempt to answer this question is like premature optimization of startup for me.
Satpal, look at the question from the pov of having a clear USP to
a) those who’re users
b) those who’re paying for it.
When I say “clear” USP, the adjective in it is very very important. An email service basically helps ppl write letters 1-to-1, to groups. A photo upload service helps people save and share pictures with those who’re interested in seeing those (friends, family, one’s own self!).
Startups sometimes focus on the frills (features/value-adds) before nailing the identity problem, and obviously invent more and more features to keep trying to attract an audience. Its usually one or two core things that make or break your service/product. Nail those first. Whether its a new market, or existing need, or whatever – but nail those first, and do not try NOT taking a stand by trying to suit everyone’s need “extensibly”. If you’re not clear about exactly what way you help users, no user ever will.
Cannot agree any more with the author of the post !
Hi Ashish,
I disagree with you. The problem statement can wait. Here is my argument:
1. It is important to have high technical skill levels to build a good product or practice. Most founders start with poor skill levels, so its a good idea to develop them first.
No point finding a nail when you have nothing to fix it with.
2. Technology is really hard to crack (relatively speaking). For an average learner like me, it takes me 2-3 years to have high skill levels (in my opinion) in my field (web app development). I’ve been in business for over 2-3 year now and it is only recently that I am adapting my self to being customer centric – finding the nail.
3. For most people, its hard to do business and technology together because technology is a mostly introverted activity requiring focus, whereas business is usually extroverted and requires sensing opportunity.
My Conclusion: If a founder starts at lower skill levels then there must be realistic expectations. Don’t expect to break out in the first 3-4 years and you should be fine. For that you must be prepared to have the “staying power” for those 3 odd years. I would also recommend not making business plans unless you have a hammer first.
cheers,
Rushabh
Mr Sinha ? Are you a venture capitalist? – I just have a difference of opinion. Most people who judge the proposals do not have the skills or capacity to judge. They are basically investment professionals who have superficial knowledge abt companies and solution methodologies.
We wish there were sparter Technology professionals who may be in a Position to appreciate – scientific solutions and approach better.(Guys needn’t nescessarily be Harvard/Stanford/IIT cndidates).I am speaking out of experience.
I just submitted a proposal to a vc -saying i needed some investment to operate a small data center to host my solution. He replied back to me .We understand you are in the software business.Data center business is hardware business.We cant see linkage between the two business.
Potato sellers and Business Men have one thing in common. The Only thing they can measure with is money.Otherwise they are more or less empty.By practice they also use hi fi words like market traction and
customer data.
You would understand the point – if you could understand how difficult a job is to build compilers ,operating systems and Development environments and how easy a job of a businessman is – to nearly Blow away 33 Billion dollars in buying a search engine.
The company is a famous company – in the software business.
I suggest – one should prepare onself skilfully ,to go about judging other works.