As a teenager, I worked in my dad's tire shop, which provided me with an understanding of the significant challenges local business owners face. It can be tough to run a local business. Not only are the hours long and budgets tight, but access to modern, enterprise-grade tech is typically out of reach.
Markets like local businesses rarely get the attention they deserve from the tech world because everyone dreams about building the next big thing, often in a space that's "hot" like AI or social media. Not that there's anything wrong with pursuing global success, but the truth is the majority of the most beneficial and creative ideas begin by simply finding and addressing a need.
Similar to local businesses, there are hundreds of markets waiting for the right technology to come along and address their biggest concerns. For those who want to make a real difference, here are three things to remember about finding the right opportunity and making something amazing out of it:
1. You don't need a tech employment pedigree to build something meaningful
I started my first company right after college, so I didn't come up through the usual engineering pathways at a big company like Google or Facebook - or even another tech startup. Over the past few years, I have come to realize that my lack of exposure to outside technology was a blessing.
Although I would certainly have learned a lot and made great connections at an outside organization, I would also have been focused on building their products and then finding new applications. Thoroughly understanding a market and its challenges can often be more valuable to a software entrepreneur than a long stint in big tech.
A great example of this is the impulse entrepreneurs have to build something like "Slack for local businesses," but without truly understanding the need. We did this exact thing recently when we created a product that ultimately didn't meet our expectations or our customers' needs. We knew that many local businesses have a problem with communication and collaboration, but, as it turns out, most owners don't wake up in the morning worrying about their internal comms issue.
To really solve challenges for underserved markets, we need to do more than just pick an existing product and figure out how to use it as a solution. This experience reminded us of the importance of first understanding the market and then creating something that addresses a genuine need.
2. Approach the problem with humility
Attempting to enter an underserved market is a big challenge. As an entrepreneur, you may think you have an ideal solution for a persistent issue, but in truth, unless you are living and learning in the market, you don't know it at all.
I thought I had an advantage with my practical, lived experience after years of working at my dad's tire shop, but I was quickly set straight. If you haven't done your homework and actually connected with people about what keeps them up at night, you will struggle to find adopters.
In the first few weeks of Podium, my partner and I were visiting every local business we could find to attract customers. At one point we walked into an auto repair shop, found the owner and started in on our pitch. After just a minute, he cut us off and told us that he didn't even have a computer at the business. They still did everything by pen and paper and were not looking to change that.
It was a perfect record-needle-scratching-vinyl moment. We both realized just how much we didn't know. We needed to understand the needs of company owners if we wanted to build solutions. It was only after we began thinking differently about local business that we started having a genuine impact.
3. Everything you build will change drastically in the first few years
If you do decide to build software for an underserved market, it's a guarantee that your initial version will be nothing like your product after a couple of years of development. Even giant software companies have gone through so many iterations that they barely resemble their early versions now.
Two years after founding Podium, my partner and I applied to Y Combinator. To our absolute shock, we were accepted. We arrived and started looking around at the other companies in our batch, only to discover everyone else was developing really cool, sexy technology like robotics or AI. We felt like impostors with our software for plumbers and dentists.
About halfway through we went to our advisors and said we were thinking about pivoting our business. Looking at these cutting-edge companies had us thinking we should build something with AI, even if we weren't exactly sure what that would be. Our advisors urged us to keep the course. They pointed out that we had two things going for us that no other YC company could say: product-market fit and hundreds of paying customers.
That experience freed our thinking. We realized that we didn't have to fit the Silicon Valley mold, and we could iterate based on need, rather than trend.
Building a software company to address the needs of an underserved market is not always easy at first. Raising money, for example, can be a challenge until you find the right investors who possess foresight and understanding.
But for those who want to make a difference, underserved markets are the way to go. By focusing on the needs of the market, approaching problems with humility and courage and being willing to change, tech entrepreneurs can find long-lasting success.