High Pain Points, Not Straightforward

One of the things I really like to see in founders is if they are solving a high pain point that is not straightforward. I get the question sometimes: what does this mean? Today, I’m going to break down this concept (from my point of view) and along the way, give some founder nuggets. Let’s dive in!

Low Pain Points/Nonexistent pain points

Pain points come in varying degrees. On the lower end, some “frustrations” are either a tad inconvenient or nonexistent. Examples (for myself, anyway) include organising email receipts, online learning that I can’t find on YouTube, the shape of my pen, or the Apple “memo app.” Many founders who build products to solve low/nonexistent pain points oftentimes struggle because there is simply a lack of demand.

One such product is Juicero, widely considered to be one of the biggest flops of all time. Juicero was a wifi-powered home juice dispenser machine, using simple produce packs that a user could insert into the machine, tap a button, and watch natural fruit juice naturally come into a glass. It generated tons of hype as well, raising over $70 million in venture capital and being endorsed by the likes of Kobe Bryant, Oprah Winfrey and Ivanka Trump. It was a grand machine, except it didn’t really solve any particularly strong pain point-no one was really clamoring for an instant juice maker to use at their home and it was expensive at $700. Eventually, people found ways to hack it by taking out the juice cartridges out of the machine and manually squeezing them themselves, rendering the machine useless. This viral hack was the nail in the coffin of a very important lesson: build products that people need/want, and make your machine hack-proof. Which goes to say; there is usually a positive correlation between pain point and demand for a certain type of product.

High Pain Points that are Straightforward

These startups try to solve common problems with high pain points (such as inconvenient grocery delivery in big cities, needing to meet virtually, loneliness of coworking, difficulties of getting taxis, or organising work tasks), but because it’s a problem that so many people share, it turns into an extremely competitive space where the margin for standing out is extremely thin. Like any industry, there will always be a market winner, but the uphill climb to be that market winner is extremely steep. An example is the 5 minute grocery delivery industry, where you have multiple players such as Getir (who bought Weezy), Jiffy, Dija, Gorillas, Beelivery, Zapp, Farmdrop, not to mention major supermarkets like Sainsbury’s, Tesco, Asda, and Waitrose offering instant delivery as well. Wow.

Initial high pain point industries eventually turn into lower pain point industries once a critical mass of solid services/products ends up saturating a particular market segment (an example of this phenomenon is live movie streaming and the aforementioned instant grocery delivery). This is why startups like Quibi struggled. If Quibi was launched before Netflix (or even just after) it would’ve had a much stronger chance at success because the industry would’ve been less saturated and the need for convenient short films on the go would’ve been a lot higher. One of the big problems with Quibi in 2019 was that because at that point there were multiple video streaming services available both on TV and mobile (Netflix, Amazon Prime Video, Hulu, etc.) and it didn’t have the necessary elements needed to stand out; namely features or marquee shows. Thus, Quibi didn’t end up solving any pain point at all, and customers didn’t really end up downloading it despite receiving loads of funding.

High Pain Points that are not Straightforward

Some of the greatest opportunities, in my opinion, lay in high pain points that are not straightforward. I define this as niche groups or target markets that face an extremely annoying frustration. Niche groups can be divided into occupations (truckers, professional athletes, lawyers), interest groups (people who like shooting guns, hiking, yoga, playing violin, editing videos) or people going through life events (death of a family member, moving house, fighting a court case, getting married). This enables the target market to be narrow enough that only those with certain types of sector-specific insights and skills can build something innovative to solve the pain point yet wide enough that there will be enough people using it to give the potential business enough upside. Building Coinbase in 2010, for instance, probably wouldn’t have been popular because although it would’ve still solved a big pain point, the amount of crypto traders/users was too miniscule to make it worth building.

One example I like to use is Convoy, a digital freight network connecting truckers, shippers and brokers. One of the most successful startups to ever come out of the Seattle area, Convoy was created because the existing form of communication between these 3 stakeholders was very fragmented, causing shippers to lose freight and brokers to lose money. Dan Lewis, the founder, saw this as an opportunity to innovate in an industry that was historically heavily looked over, and created this synchronous B2B communication platform that changed the game for the freight industry and solved a massive pain point. Another example I like to use is SimpleCitizen, an “Turbotax for immigration” that helps immigrants stay on top of their visa status and applications. This was an excellent, “non-straightforward” niche to target because most people that were born and raised in the USA don’t understand how challenging the immigration process can be, from high amounts of difficult forms to back and forths with lawyers to disorganised admin, among other things. Sam Stoddard and Ayde Soto both had experience with this frustrating pain point, resolved to fix it, and revolutionized ImmigrationTech in the process. Finally, Guardian Angel is one of the hottest UK startups of 2021, creating an all-in-one platform for death-planning that includes bereavement support, legal services, life insurance among other things. DeathTech historically has been an underserved industry due to it being “taboo” (which, in my opinion, there is a lot of opportunity in “taboo” segments) and not something many enjoy talking about/working on solutions for. Sam Grice took advantage of this, and created a unique product in a space with high pain points that weren’t straightforward.

A caveat has to be given that timing is extremely important; without the necessary technology/infrastructure to solve a particular pain point at scale, the product/service won’t live up to its full potential and struggle to solve the problem and/or get customers. A cautionary tale is Webvan, otherwise known as the “Instacart of 1999.” At the time, it solved a high pain point that wasn’t straightforward because working people didn’t always have time to go to the supermarket and sometimes needed food delivered to them (which nobody was really solving at the time). One of the big problems, however, was that the internet infrastructure in 1999 wasn’t as strong as it was in 2014, so Webvan had to build its entire digital delivery infrastructure from scratch, costing tons of time and money. Coupled with overkill blitzscaling and the market crash of 2000, and it went bust in 2001.

What this all says about competition/building products

1. Try to build products/services with high pain points that are not straightforward. Tap into under-the-radar industries such as LegalTech, WorkerTech, ConstructionTech, DeathTech or  ImmigrationTech. Tap into under the radar problems that are highly frustrating for certain types of people that you can solve better than others.
2. There is a difference between competition and saturation. Ideally you want to find a happy medium where there is enough competition to validate that the industry you are operating in/type of product has demand but there is still room for you to find a niche.

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