Riding a Mega-Trend Isn’t the Same as Solving a Real Problem


Mega-trends are good. Investors like mega-trends. There are lots of opportunities that exist as a result of mega-trends. For example: The population of old people is going to massively overshadow the population of younger people that can replace them in the workforce. That sure looks like a huge opportunity in the recruitment space!

But be careful. Riding a mega-trend isn’t the same as solving a real problem. Big, bold statements are great. Startups can very effectively align themselves with mega-trends. But it’s equally important to peel away the big numbers, inevitable trends, and macro factors that seemingly drive opportunity — and get into the nitty gritty details.

It’s not good enough to say (for example): “There will be too many jobs for too few people in the next 5-10 years. Employers will have significant staffing shortages. Competition for talent is going to increase drastically. That’s going to cause all kinds of problems. We help employers reach job seekers and attract them more effectively.”

No one can argue with statement #1. Or #2, #3 and #4. When pitching investors (or customers!) it’s helpful to get them nodding in agreement, even if you’re stating the obvious. So from that perspective the mega-trend is important and the supportive statements too. But it’s the last statement that’s problematic. That’s where there’s too little meat on the bones and a lack of specificity. I made this mistake with Standout Jobs. The mega-trends were there (and still are) driving social recruitment, the need to hire young people, employer branding, etc. But those aren’t “solvable problems.” We needed to, and worked actively on, getting much deeper into the problems and understanding the “real” (not macro-trending) world our customers were living in.

Going from an undeniable mega-trend to a refined, core problem … and even more challenging, to a refined, specific and quantifiable solution is where many startups stumble. They latch onto a mega-trend and convince themselves that they now understand a very specific problem that they’re solving. Or they use a mega-trend as a justification for building a product or providing a service that doesn’t have a really clear problem. The mega-trend becomes the problem.

For many customers, mega-trends are too big, complex and in some cases too far into the future, for them to really care about, at least when it comes to making purchasing decisions. If mega-trends inspired action by themselves, we’d all be looking for old age homes (we’re going to need ‘em!)

Startups need to find the acutely painful problem that customers suffer from and target that with a laser beam. The mega-trend provides context, but not the specificity of definition to drive real understanding of a meaningful problem that requires a solution.

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July 2, 2010 Posted in Startups by

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  • http://nextgencrm.blogspot.com/ Ami Assayag

    This is similar to the Current SaaS CRM space – there are many startups in the game but most don't provide solutions that are different than what already exists. The market is huge and continues to grow, so some of the the non-innovators actually make it, but most don't because they are following the trend instead thinking of ways to more efficiently fix customer problems.

  • http://twitter.com/pricing Chris Hopf

    Appreciate the post Ben, well done.

    This is one of the challenges I often bring up to a lot of my client companies. There are, however, legitimate opportunities within what you are calling “mega-trends”, it really depends on what the objectives are.

    Some companies want to capitalize on the trend and are fully aware of the fact that the business is not sustainable long-term. What is important is that they know this going in . . . as you point out, many do not and believe they are driving towards a sustainable business.

    One of the most important factors in sustaining a successful business is an organization's ability to monitor, understand, anticipate, innovate and adapt to what drives value within markets. Markets are always about value and trends highlight the variability and often volatile nature of value.

    Boy, I could go . . . just some thoughts. Thanks again for the post.

    Chris Hopf
    http://pricingwire.com
    @pricing

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  • Cadmar

    I quite agree with mega trends. It is too easy to fall into this pattern. The trick is to locate a mega trend before it becomes a mega trend. Take for example, companies that are “too small to fail”. These are those that have no debt and inventory matches sales. They can ride out any situation that the economy throws at them. They can raise or lower their retail prices. Unlike treasury bills or bank deposits or established companies that are trapped in the inflation spiral, these “too small to fail” companies can go with the changing f the winds. These companies will protect wealth, not gold nor commodities. Of course, no one has really discussed this, so it is not a mega trend. Take a look at small companies, such as stridedeck.ca, and you will see what I am targeting.

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About Ben Yoskovitz
I recently joined GoInstant as VP Product. GoInstant changes how we use the web, making it shareable like never before.

I'm also a Founding Partner at Year One Labs, an early stage accelerator in Montreal. Previously I founded Standout Jobs (and sold it). I'm a hands-on startup guy, helping companies grow successfully from the idea forward. You can reach me at byosko at gmail dot com.

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