"What's the Need?"

A little bit of a digression but related to the overall theme of starting up. I received an email from a developer asking me about my opinion on a startup he was thinking about getting involved in. The startup is kind of like a rating service about bosses. You can give your boss a rating along a spectrum of good-bad. Kind of like "Digg", with good bosses ending up higher on the scale than bad ones.

On first glance this seems like a good idea. Everyone has a boss, not all are great. This could help users find the better ones. If you pose this concept to your friends you will probably get some enthusiastic responses. However, you have to look more closely at a concept to determine if it really is worth pursuing. In this case you have to ask the question "Why would the reviewer share a rating?" In business they call this the "Value Proposition" or "Pain Statement". What is the compelling reason that the user would "Need" your offering? If there is no compelling need the chances of success are lower. Finding that sweet spot is a key consideration in getting investors. If you can't point to a compelling need with a smart strategy for filling it, you are highly unlikely to get money from sophisticated investors.

The good news on this is that you don't have to to come up with the solution to a "pain" right away. It is more important to find a big enough area of interest for you to start doing some heavy research in, and then finding what in that area needs the most intervention. If you can find a way to apply web technology to a big problem, you are well on your way to a successful startup. For example, we started bodbook with an idea about connecting friends with word of mouth about movies they had seen. We went about creating this social network with some cool features and then released it to the public...it bombed. Luckily, despite at first not realizing what was most compelling about what we were doing, we were able to reorganize around the core concept of sharing word of mouth. Given that our first offering failed we are lucky to be working in a big area with lots of need, we just have to iterate within it until we find our sweet spot. That should be your goal also.