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

July 2, 2010 by Ben Yoskovitz

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.

Filed Under: Startups

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Ben Yoskovitz

Founding Partner at Highline Beta, a hybrid venture studio and VC firm that works with large, ambitious companies to identify new areas of opportunity through internal and external innovation.

Previously I was VP Product at VarageSale and GoInstant (acq. $CRM), and Founding Partner at Year One Labs.

Angel investments include: Breather, Spoiler Alert, SendWithUs and others.

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