No (market) pain, no (financial) gain — Part One

During the Spring 2010 3DS at the University of Texas-Austin, we were all privileged to work with a truly exceptional group of students.  We learned firsthand the types of problems one can solve if you expose an interdisciplinary group of students to entrepreneurship.  

Ever heard the phrase “scratch your own itch?”  It is the conventional startup advice that entrepreneurs should work to solve the problems that bother them personally.  After all, no one knows your problems better than you, and if you’ve got the problem, it is possible other people do too.

If you’ve ever explicitly told college students to “think of problems in their own lives,” you’ve heard them mention “ticketing,” “event discovery,” “photo-sharing,” and other problems that afflict today’s college student.  While this is a good beginning for entrepreneurial thought,  it is dangerously limiting.   It may even discourage the type of thought that sparks the most powerful innovations.  As Gary Hoover likes to tell us, some of the best ideas don’t actually come from people scratching their own itch–they come from careful and astute observation of an industry and its problems.

The Meaty Problem

“The average patient receives 6 medications per day, 3-4 pills per medication.  So the average patient receives anywhere from 18-24 pills per day.  The average patient receives different combinations of pills 4 times a day.  The average nurse works with 20-30 individual patients.   This means that the average nurse must accurately collect and dispense anywhere from 360 to 720 pills per day, all while ensuring that the right patient gets the right medicine at the right time.  Make a mistake and it could be as little as an upset stomach and as much as death.”

These are the types of problems we LOVE at 3DS.  Ok, so we wish these problems didn’t exist, but we LOVE it when we students choose to work on these problems.

What you “think you know” could kill you

Before coming back for this MBA, Thomas had worked as a healthcare consultant for five years.  He had learned the economics of the nursing home industry and had a unique appreciation for the financial and medical challenges faced by everyone from the nurses who so carefully dispensed medicine to the executives who ably managed these institutions.  His experience made him certain that he understood the market and that he had the perfect solution for reducing medical error in nursing homes.

This certainty made us “certain” that we had to kick him and half of his team out of the building on Saturday.  No, it wasn’t punishment.  It was, as my 9th grade science teacher used to say, “an opportunity.”

On Saturday, everyone at 3 Day Startup–whether they be engineers or MBAs–must talk to customers.  This forces them to test their preconceived notions and to determine if the solution they had in mind is actually the best way to solve the problem.  Furthermore, it helps students gain valuable personal experience into the type of problem they are trying to solve.  To put it bluntly, Saturday is a reality check.

As Thomas told the group that evening:

It changed everything.  Our initial hypothesis was to hook up our system to barcode scanners so that everything could be perfectly tracked.  We quickly learned that this wouldn’t work.  The nurses explained to us in vivid detail why this was the case.  They also helped us recognize bigger problems, like how using our technology to help log and track resident interactions.  They said this would be just as valuable as preventing medical error.  Yeah, another thing.  We kept calling them “patients,” when in reality they are “residents.”  I didn’t realize how much this terminology meant to the actual people using the software we were working to develop.  

There are two principal ways of gauging whether you are building something people want:  (1) do you want it / scratch your own itch; and (2) asking potential customers.  The experience with Thomas taught me that the second not only leads to potentially worthier problem-solving but it also tends to be more personally rewarding.  

In part two, we’ll discuss how to make the “scratch your own itch” methodology compelling and valuable.  

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