It would be the app that changed the way people lived — the next Uber / Airbnb / Instacart. I finally found a gap in the market that seemingly didn't have anyone else, so naturally I went full throttle on making it happen. And it failed... Miserably.
Entrepreneurship is flooding college campuses across the world. Every student, from Ivy League schools to community colleges, has an inclination towards starting their own company. Movies like The Social Network and shows like Silicon Valley have glorified startups to the point where "Co-Founder & CEO" is a LinkedIn title almost more prevalent in a university town than San Francisco itself.
Schools are jumping on the trend as well. There are more than 1200 university business incubators worldwide, which is 50% more than the number of business schools accredited by the AACSB. This shouldn't be surprising; after all, some of the greatest minds in tech are university drop-outs. But the bigger question is whether this trend hurts or helps university students, and whether the vast majority are prepared for or understand the work it takes to start a business.
You too can change the world!
Most college students have an idea for a startup that involves one or multiple of the following:
- Beer / alcohol
- Textbooks / notes
In most cases, it's tied together with the use of a marketplace app, this being an app that creates a community for two parties (often buyers / sellers) to interact. For a company like Uber, that's connecting drivers and people looking for rides.
Why marketplace apps? Because they're exciting, social, and can go viral quickly. The allure of expanding to new cities (campuses) and growing a user base is much better than cold-calling & emailing businesses to sell software.
The rather limited list of ideas is a product of the life of a university student. We often want to make ideas that solve problems we face day-to-day, and those few ideas generally sum up the lives of a lot of university students (myself included). The issue is that there's a problem with the marketplace app + university ideas that really hurts the idea of entrepreneurship.
The vast majority of profitable, successful businesses are not game-changing or explosive. They take time to validate, rework, and grow. Basecamp, a project management tool, is a great example of this. Founder & CEO, Jason Fried, gives some insight into their story:
This is a stark contrast to the typical approach of raising tons of capital, growing users, and disregarding revenue or profitability. There's countless examples of startups that pursue this path, and that entices students to think the same way. They rely on "X months of runway" to power a frantic attitude and brutal work culture, in hopes to finding a model that works. Heck, some even IPO without figuring that part out.
I'm guilty of this too. My game-changing idea in 2015 was to create a marketplace for students to lend and rent items. I was frustrated by how much stuff I'd collected over the year, but also wish I could temporarily access items like speakers, DJ sets, and musical instruments for a night at a low cost.
So after polling a few friends, I decided to build an MVP and start gathering users. I paid a firm in India to make a clickable concept, and started building a business model and slidedeck on how it would work. I had learned this approach from previous pitch competitions and startup weekends who preach the idea of 5-year plans and business strategies to make ideas happen. This was my first mistake.
What I should have done is researched and validated my idea, thoroughly. As unsexy as it sounds, I should have spent a few weeks knocking on the doors of the numerous dorms on campus, gathering emails and polling students on what they thought about the idea. A lot of university incubators back this approach, but unfortunately it isn't enough.
The reality is that most people say they'll buy / support something, but may not actually. It's better to understand whether people find value in your product, and even better, are willing to put money behind it right away. This pulls from the van Westendorp Price Sensitivity Meter, where you test multiple models before sticking behind one.
I learned from this in my next attempt to build a startup, which was essentially an AI for content marketing. I called and met with marketers at a number of startups, diving into the problems I thought they had, how they were trying to solve it, and what the gaps are. It wasn't pretty; it took about 6-8 weeks to gather enough information to realize the idea wasn't feasible.
This sucks. But it's necessary, and this is disappointing in an age of instant gratification. This is especially true on college campuses, where students are constantly prepping for the next test or internship interview, operating on short timelines and goals. We want results right away, and that's not the case with entrepreneurship.
Fill the crack, don't build the bridge
The one piece of advice I get from successful startup founders is to fill the crack, don't build the bridge. It's a million times easier to solve small problems for big markets than to try and create a new market for an unseen problem.
Think about software that measures the happiness of corporate employees and gives an aggregated report to management every week. Say it requires workers to submit a 25-word paragraph at the end of each day to a 3rd party app, and the app uses sentiment analysis to show management how their employees are feeling. You can use existing frameworks for the analysis, and train it for what employees might report.
For validation, you can ask some small / medium-sized businesses in your area for their thoughts. Do they have a strong grasp on how employees are feeling? What are current mediums for giving feedback? How much time / money does that process currently take?
Now contrast that to an app that tries to match students for housing. What are all the intricacies that go into finding a housemate? Who do you ask first? Is there a revenue model that doesn't rely on advertising? How is this better than a Facebook group? Do most students even have the problem of finding a housemate?
This is an idea I've heard a few times since starting university, and while it sounds great, it's hard to validate and be profitable. However, it's sexy and initially appeals to a lot of university students. If someone knocked on your door and suggested it, asking if you'd sign up, you'd probably say yes. But would you pay for it? Do you really need it?
Entrepreneurship is the new fad, and game-changing startups are becoming more and more attractive. It's hard to take a step back and evaluate ideas before diving into them. It's even harder to reject wild ideas, and focus on smaller problems that are easier to validate.
At the end of the day, your startup may not change the world, but it can still change lives. Profitable startups provide livelihoods for their employees and support their families. These startups can support local charities and youth sports teams, while their employees can be crucial parts of local communities. That may not be game-changing, but it's pretty damn cool.