You're more likely to succeed as an entrepreneur if you're motivated by helping solve other people's problems, not your own.
When you decided to become an entrepreneur, what reasons motivated that decision? For some people it is the opportunity to make a lot of money, the freedom to live by their own convictions, or to live a certain lifestyle. While these are great personal goals, too much focus on these things can lead you down the wrong path.
The decisions we make every day build upon our existing goals, values, and beliefs. We call upon these foundational thoughts to inform the decisions we make so that we don’t need to re-evaluate every detail and consequence every time we make a decision. Imagine how your product or service offering might be affected if your decisions are driven primarily by a desire to become wealthy or to set yourself free from mundane work. Do you immediately filter the options by what has the biggest immediate profit margins? Or, do you limit yourself to opportunities that you could do from a laptop while traveling the globe? If this is your focus, then are you actually solving any problems? Are you contributing value or focusing on extracting value?
Contrast this with setting your attention upon helping others. If you start by talking to prospective customers to understand their pain and find a problem they need solved so badly they will pay you for a solution, that’s a customer who not only will be thankful and loyal over time, they’ll likely spread the word and do your best marketing for you. That loyalty and vitality is startup gold, but is rarely accounted for in our early calculus of the best opportunities.
If you’re focused on calculating profit margins, you will likely miss the nuance of what problems truly need solutions. You’re also less likely to connect with a base of customers so deeply that they spread the word on your behalf or stick with you after competition enters the market. You’re less likely to realize the real opportunities, because you are less likely to be solving a real problem.
If you’re focused on high margins and high volume, this will often lead you to a market that is already peaking and nearing consolidation. Volume usually comes from the market having matured and high margins attract competition. One should be wary of this scenario-if it’s too good to be true, there’s a good chance you’re late to the party. This is the classic problem with chasing money: You’re one step too late and end up facing market consolidation before you’re ready to contend with it. Any value you may feel that you are contributing is likely redundant or inferior to others already entrenched in the market.
A similar challenge awaits if you limit yourself to looking for opportunities that fit your lifestyle. If you limit yourself to opportunities that you could pursue in your free time or while trekking the globe, for example, there’s a good chance you’ll land upon a thin business model that’s easy to setup and quick to generate cashflow, but never invests in building your value chain (better sourcing, delivery, customer service, etc). Affiliate marketing, drop-ship e-commerce websites, and “me too” mobile apps that add minimal new value to the market are examples that come to mind.
With these businesses, you are only contributing a thin layer of value over the top of other businesses who have made the necessary investments and own the entire value chain; you are putting a metaphoric cherry on top of someone else’s ice cream sundae and pretending it your own. But this won’t last for long. Businesses that facilitate your profit margins will eventually capture the inefficiency you’re exploiting, particularly if you do not make significant investments to reinforce your long-term value and capability to stand on your own as a business.
Neither chasing money nor chasing a lifestyle gives you the opportunity to build a lasting or meaningful business. They are temporary opportunities that only exist because of a gap between market demand and what suppliers are yet able to provide. Once the inefficiency of the market is corrected and there’s no longer that temporarily gap between supply and demand, the jig is up. And if you are focused on enriching yourself rather than helping others, this is the sort of opportunity you will most naturally align yourself with.
If you are serious about starting a lasting business, stop focusing on your own goals and instead focus your attention on serving others, discovering their needs and how to help them. Think about how to create significant value for a core group of people and how you can help them live a better life or accomplish their goals. This approach will naturally align your efforts with the market and put you a step ahead of competition, rather than always being a step behind. Who knows, you may even sleep better at night, knowing you’re making a difference somehow.
Neal Cabage: is a product strategist and technologist. He has worked with top online brands, spoken at leading industry conferences, and founded and sold two online start-ups along the way. He co-authored the 2013 book The Smarter Startup and continues to research why some online products succeed when many do not. You can find him on Twitter @NealCabage.