Why Successful Startups Always Look On the Dark Side of Life

True innovators — the kind of people who launch the most successful startups —are not always very satisfied people. In fact, they tend to be restless with things that take too long, or that are more complicated or cumbersome than they should be. As an old New Yorker profile of the man who created the original PowerBook for Apple was so aptly titled, they are good at “looking for trouble.”

The question for startup founders right now is, what kind of trouble? With so many accelerator programs, entrepreneurial clusters and a move by big businesses to become more startup-like, it may become increasingly challenging to identify market opportunities that aren’t already flooded with potential competition. Is it really worthwhile to create yet another e-commerce tool to sell products, or another online marketing service?

In older industries, one of the best ways to look for a competitive advantage is through reverse engineering: take a best-selling product apart, figure out how it was made, and then either replicate its best features or create a version with new features that improve on the original. This can be an important step towards building something that customers truly want or need.

I believe the next wave of great startups will work in much the same way, but they won’t be reverse-engineering products. Instead, they will deconstruct everyday business processes and look for ways to reduce unnecessary steps, do away with unfulfilling tasks or speed up the things everyone assumes have to be done slowly. They’ll look at what people love to do, but then identify the stuff that comes along with those things that are less enjoyable. Here are some examples of what I mean:

You can order almost anything through a smartphone — but you still have to pay for it.

Everyone talks about the rise of ridesharing services such as Uber and Lyft, which introduced the genius of being able to order transportation via a mobile device. What people often overlook, however, is the benefit offered at the end of the taxi ride. Instead of those minutes spent fumbling for your wallet, figuring out a tip, waiting for change or for a credit card to be processed, passengers can now walk out of a car immediately upon arrival. When will we see more retail services that recognize us via mobile device the moment we set foot in a store, and simply charge items to our account rather than make us line up at a checkout? Square is already doing this in coffee shops, but there’s potential for much more. The future of payments is not just bringing them to the smartphone device. It’s doing away with the experience of having to go through the motions of paying at all.

You’ve hired a great person — but now you have to put them to work.

DocuSign arguably owns the market for digitizing the process of signing employment contracts and benefit agreements, but that’s only the beginning of bringing on new talent. Employee onboarding, as it’s called, can be time-consuming and onerous, especially in small businesses that don’t have their own HR department. That means business owners might be the ones showing them around the office, explaining where to find things or even how to access company software systems. Rather than launch another job board, Kin HR, PeopleFluent and a host of other startups are finding ways to handle this second stage of the hiring process.

You’ve made a lot more money — but now you have to invest it.

Wealth management used to be something that was only available to the most high-income earners. That’s partly because financial institutions needed to put considerable resources (such as dedicated investment advisors) to serve clients appropriately. More recently, though, analytics and algorithms have spawned startups which are sometimes called “robo-advisors” but are essentially bringing the same convenience of investment assistance to everyday people. Over time, look for similar innovations to spring up in many other finance service processes — not only between banks and their retail customers but between a variety of borrowers and lenders and investors in the B2B space.

Even generating sales, which most firms would agree is a good thing, comes with secondary steps that benefit from software-driven automation. That’s why Salesforce Ventures recently invested in Apptus, which handles contracts and payment collection, among other things. There are bound to be more startups that find their sweet spot in other steps before and after the sale.

It’s not that great startup founders are inherently pessimistic. In fact, you could argue that they have a more holistic perspective, seeing golden opportunities in the most irritating or unfulfilling tasks. They reverse-engineer everyday life and, instead of putting up with the status quo, figure out how to make those extra steps a little easier. In other words, they look on the dark side because that’s where the bright light of innovation will be needed — and appreciated — the most.

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