I love listening to the origin story of a company. It’s always interesting to hear how founders came across a problem and figured out how they wanted to solve it. But sometimes I hear the opposite: a founder decided to build a solution and then tried to figure out how it could help customers.

I call this the solution-in-search-of-a-problem challenge. When founders build a solution without keeping the customer or problem in mind, they end up in a gray area. They build what they think people want instead of what people actually want. The solution ends up doing an OK job of solving a few problems but not a great job of solving any. Customers are reluctant to pay for it because it doesn’t create much value for them. The founders find themselves talking to different customers with different profiles in search of one that loves the product. They’ve often put so much time into building the solution that it’s hard for them to see that it’s not likely to succeed because it’s only an average solution.

If you’re an early founder, keep your focus on the problem and your customers so you can avoid building a solution in search of a problem.

I met with a founding team today to learn about their journey to date. They excitedly shared that they’d had a big realization that led to a breakthrough. The realization was insightful. I was curious to know how they came by this key piece of info, so I asked.

The founders had been building a product and getting feedback from customers for months. They thought they were building something that solved customers’ pain points, but the user sign-ups and engagement weren’t good.

The customers were still complaining about the problem, so the team was stumped. They had been asking customers how they could improve their app to make solving the problem easier, and they incorporated the responses in their product. One day, the CEO explained, he began asking different questions. He asked customers to share with him their current behaviors in running their business. He then asked what they were already doing to solve this problem (nothing). He learned they used many apps and were loath to try another one. He stopped asking how his company could make its app better and began asking how it could make life easier for them.

The team realized they were trying to get customers to change behavior and use another app. But their target customers are small businesses. The owners are stretched thin; they don’t have tons of free time. They’d rather lean into old habits than learn new ones.

The team noticed that the business owners communicated extensively via text messages, so they built a feature that allowed customers to communicate with the company’s app via text messages. Next thing they knew, engagement and sign-ups surged. Because the team asked the right questions and built a product that leverages existing behavior, it finally solved the problem in a way customers embrace.

The early parts of the founder journey are all about understanding the problem and your customer. Asking the right questions and paying attention to what your customers are already doing can be the key to building something they’ll love.

Chatting with an early founder about his plans to grow his company, I noticed he kept mentioning where the stock market could go if the recent downturn continues and the possibility of a recession in the short to medium term. This founder’s decisions are being affected by hypothetical future scenarios that are out of his control.

I quit my job and went full-time on my start-up just as the financial crisis was kicking into full gear. It was a scary time, but I didn’t let that stop me from pursuing the opportunity I saw in front of me. Because of the crisis, I was able to negotiate very favorable terms I otherwise wouldn’t have gotten and gain access to relationships I otherwise wouldn’t have had access to. During all the macro turmoil, I focused on growth. The business grew throughout the crisis, and I felt somewhat insulated from the macro dynamics because I focused on the opportunity I saw rather than the broader doom-and-gloom environment. When the crisis ended, we were in prime position to benefit from the ensuing economic uptick.

While not an ideal time for many, the crisis ended up helping my start-up and positioning us for greater success. If you’re an early-stage founder, be aware of the macro environment and how it could develop but focus more on the things you can control and on creating value by solving a problem. If you do, your company is likely to grow despite the macro headwinds.  

As an early founder, I often got backed up on email. After I finished working on the business all day, I couldn’t consistently respond to all my emails. That came back to bite me a few times when I missed some that were important. I either saw them too late or didn’t see them at all.

Effective communication is important, and email is one of the main forms of business communication. As I matured as a founder, I learned the importance of good communication, including managing my email effectively. And I learned a few tricks. These two worked the best:  

• Inbox zero – This is the best but most difficult approach. You clear your email inbox out every day. You deal with every email, even those that don’t require a response. I checked emails once a day in the middle of the afternoon to accomplish this.
• VIP senders – This was effective when I was pressed for time. Most email clients allow you to designate certain contacts as VIPs and segregate emails from them. I called it my VIP inbox. If my day was busy and I couldn’t get through my entire inbox, I made sure to deal with every message in my VIP inbox.

Managing email remains one of my least favorite tasks. I still struggle with it at times. But I realize that it’s difficult to be a good communicator if you don’t have a good email strategy.

Today marks the end of my ninety-sixth week of working from home (mostly). Here are my takeaways from week ninety-six:

• Iterative learning – This week was a reminder that getting to the ideal state of something is an iterative process that isn’t guaranteed to be smooth.
• January – Monday is the last business day of January—this month has flown by! This year is beginning very differently than 2021: we’re hitting the ground running. Last year, things ramped up slowly.
• Habits – Sticking with my new daily habits has been working well. It will take time, but I’m starting to see some of these habits produce positive results.

Week ninety-six was a busy week that required me to juggle competing priorities. I’m looking forward to next week being more normal.

I’ve shared my views on the digitization of distribution and its impact on banking. Today I read about Apple’s new service that will allow small businesses to accept payments on their iPhones. No hardware (i.e., payment terminal) will be required. Consumers will be able to tap a credit card or another iPhone against the business’s iPhone to send payment. The service hasn’t been launched as of today, but it’s coming, and it shows how Apple is inching closer to being a bank.

Helping consumers and small businesses with financial services is an enormous market—one of the few that could move the needle for a company the size of Apple. Banking is about to go through rapid change. Don’t be surprised if Apple ends up being the go-to bank for consumers and small businesses.

I spoke with a founder today who’s going after a consumer market after others have tried and failed. This founder is super excited and passionate and unconcerned about the competition. I eventually asked why he’s so confident he’ll succeed. He smiled and shared something he learned from his early customer interviews.

This founder has ferreted out a key insight. It’s something all the others missed and probably one of the causes of their failure. He’s using this insight as the foundation for his company. It informs what he’s building. He’s confident that if he stays true to it, he’ll be successful.

Key insights are an entrepreneurial competitive advantage. If you’re an early founder, consider asking yourself, What’s my key insight?

When I talk with early founders, I try to understand their business model from a high level. Some are operating marketplaces, while others are selling access to their software. Sometimes I encounter early founders who are trying to execute two business models under one roof.

To be sure, many companies have more than one business model and have enjoyed success. Usually, though, they focused on one core model in the early days. They solved the core problem well and scaled that solution with one business model. As they matured (and had more resources), they added another business model. Think Amazon selling goods to consumers via digital commerce and then, after more than a decade, expanding into selling cloud computing.

If you’re an early founder, avoid spreading yourself too thin. Consider mastering your core business model before expanding into a new one.

I spent Q4 of 2021 thinking about what I want to do differently. Historically I’ve set goals, but I always thought something was missing. You can do everything that’s in your control and still not achieve a goal. I never liked that, and I decided to focus on habits and systems in 2022. I read Atomic Habits and crystallized the habits I want to have that align with my identity.

I began implementing my new habits at the beginning of the new year. It was harder than I expected. I struggled to be consistent with all my new habits, and as I did, I realized that I need to simplify and focus on the one habit that will up the likelihood of my sticking to all my habits. So I did—and it’s been a game changer.

I’m now measuring one action every day. I have data for only a few weeks, but it’s clear. When I do this one thing that I want to be a habit, my days are much more productive and balanced and I get the outcomes I want. When I don’t, I’m far less productive, I’m reactive, and I don’t get the outcomes I want. This habit has such a big impact on my day that I consider it a foundational habit.

Figuring this out has changed my thinking about habits. Maintaining them felt like tons of work, and I wasn’t sure I could do it. Amazingly, it now feels like an easy life that I can maintain. I’m still doing the same things—it’s just how I think about them and what I focus on that changed. Glad I figured this out!

I’ve recently been thinking about making an investment. I’ve chatted with people I respect who are credible in the space to get their perspectives. That was helpful and exposed some gaps in my thinking, but it didn’t sway me one way or the other. Today I had some downtime, so I built a quick spreadsheet.

I’ve built tons of spreadsheets for decision-making before, but I included something new in this one. For this investment to be successful, several things would have to happen. I thought through the probability of all of them happening and included it in the spreadsheet. This exercise was helpful because it forced me to carefully consider a variety of things, including what that percentage is and why it’s the right percentage. It helped clarify some things and got me closer to a decision.

Like many other things in life, this investment has a chance of being successful that can be estimated. Thinking about that probability was helpful.

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