maandag 14 augustus 2017

Why a good entrepreneur falls in love with problems

Right from the start of his lecture, Uri Levine grabs your attention – till the end. This end must be forced by the chairman of the day, because this successful ICT entrepreneur always has “one last story…” He provides valuable lessons for upcoming entrepreneurs.

 Uri Levine

In “I don’t see any problems, only challenges” I described the difference between a challenge and a problem. Because ‘challenge’ is often used as an euphemism for ‘problem’. I stated that a challenge is a task you assign to yourself, while others force a problem upon you.

For the Israeli ICT entrepreneur Uri Levine a problem is the beginning of a new company. In a gathering of other top entrepreneurs he looks out of place, because of his casual clothing. And on his T-shirt a proverb is written, another one each day; quotes from his lecture. For instance: “Fall in love with the problem, not the solution”.

And with that statement his vision of entrepreneurship has been spelled out.

Fall in love with the problem, not the solution
For Levine a company starts with a problem. Problems like:
  • You end up in a traffic jam, because you don’t know how to avoid it
  • You don’t know how much you pay for a service, because the tariff structure is unclear
  • You ask yourself why you need to work with a middleman.
It’s vital to carefully select a problem worth solving. Levine asks one question: who will be out of business when I succeed? If you don’t know, it’s not big enough.
Or, to put it another way: find a solution for many users with a problem.

Levine recommends that you focus completely on the problem, without losing your heart to a once-chosen solution. Don’t be solution-oriented, but stay flexible.
The only correct order is: problem – user – solution.

Levine is convinced that only solutions that have the potential to change or (even better) to disrupt an entire market, are worth the effort. Newcomers have a chance to succeed, since existing companies have an interest in the status quo. Existing companies seek the comfort zone, newcomers come from the outside and have nothing to lose.
Where were companies like Facebook, Nokia, and Uber ten years ago, where are they now, and where will they be in ten years?

Levine mentions some characteristics of markets that are asking for disruption:
  • A market with middlemen, who take too much profit
  • A market where price is not in balance with value; you simply pay too much
  • A market in which certain regulations don’t work – nice example: coupons that are not claimed.
In such situations, there are four starting points to disrupt a market:
  • Product: you don’t need to own an item (for instance, a car; the old business model) to use it (the basis for a whole new business model)
  • Price: you can reduce it by removing unnecessary costs from the system
  • Availability: Uber created new inventory, because the number of taxi rides increased with the arrival of Uber
  • Knowledge: from shielded data (not available and/or in the hands of few) to shared information.
Furthermore, Levine mentions some signals that indicate that you’re achieving the intended impact, such as:
  • You are charged with a patent infringement – sue them back
  • People send thank-you letters.

The biggest enemy of good enough is perfect!
Another lesson from Levine is that you should not aim for perfection. Establishing a successful business is a journey of failures. Whatever you develop first often does not solve the problem: you need to look further. Therefore, a true entrepreneur is not afraid of failures.
In fact, according to Levine, a failed entrepreneur has five times more chance to succeed than a person who never experienced failure.

An entrepreneur is responsible. He creates a workplace for people who may stay there their whole life. Therefore, an entrepreneur celebrates the successes with his employees, for example the first so many customers.


Free and good enough wins every time
To the ICT services that Levine developed, he applied his own lessons about entrepreneurship.

Waze
Levine's first company, Waze, originated from the desire to avoid traffic jams. Waze is a navigation system that is not built on existing map material, but based on data obtained by crowdsourcing. The routes that drivers made were projected on a blank map by means of GPS. After about six months, a sufficiently reliable road map of a city can be generated, which will be completed with street names and useful places. For example, you can recognize one-way traffic in the patterns. Additionally – and here's added value – you can deduct from the speed of the car if there is a traffic jam on a particular route. The app, which also collects data, recommends a diversion: drivers help drivers. Waze started as a tool for commuters in Eastern European cities like Bratislava and Prague, and now includes large parts of the world.
Waze can be downloaded for free on a smartphone.

Moovit
Moovit is the number 1 public transportation app in the world, with users in 1200 different cities. By combining all the transportation options in one app, you avoid ending up at a closed station or waiting for a bus that will not come.
Moovit can be downloaded for free on a smartphone.

Feex
Feex arose from the annoyance that some people lose a large part of their retirement scheme to additional costs, but are unaware of it. And if you don’t know how much you’re paying, you’re paying too much. Feex shows these expenses and indicates how to save on it.
For more information about Feex: www.feex.com.

Roomer Travel
It may happen that you have booked a hotel room, but you are unable to come, while your reservation is non-refundable. For those cases Roomer Travel has been developed, to sell your hotel reservation to someone else. This solution creates efficiency in an inefficient market.
Roomer Travel can be downloaded for free on a smartphone.

Engie device
Engie device arose from the annoyance that a garage advises you to replace a particular component, but you are not convinced of the need. With Engie, you can self-diagnose your vehicle and determine whether maintenance is required. By sharing knowledge, a new market balance is created.
For a small fee Engie is available as a smartphone app via: www.engieapp.com.

Fairfly
Before you book a flight online, you often follow the flight rates for a while. But who does that after the booking has been completed to see how these rates develop? You can with Fairfly, which gives a signal if the rate has decreased to a level that changing your flight has become attractive.
For more information about Fairfly: www.fairfly.com.

People don't stop dreaming when they get old, they get old as they stop dreaming
Levine does not manage those companies himself; he has appointed good executives. And in 2013, he sold Waze to Google for $ 1.15 billion!
Once a problem has been addressed successfully, the real entrepreneur focuses on the next problem. Levine is such an entrepreneur, always busy with his next business – and ready to tell one last story...

This is a repost of my (Dutch) April 3, 2017 post.
Read my May 20, 2013 blog post about the reason why of my English reposts.