When looking for new business opportunities or new investment opportunities in startups, it is useful to think about the customer and the barriers they face with existing products and services (let us call them solutions) in getting a job done. Customers face five common barriers while getting their job done:
- Wealth Barrier: Existing products and services may not be affordable. Healthcare that is not affordable, education that is not affordable, insurance premiums that are too high, consultants who charge high fee etc.
- Time Barrier: Not enough time to get the job done. No time to prepare food, no time to learn something, no time to shop around etc.
- Access Barrier: It is not possible to get access to something. For example, not able to access lectures of a Harvard Professor. Not able to access a talented programmer in India or a designer in Africa. Not able to access startup investments in emerging markets. Not able to access a collectible or a first edition of an obscure book.
- Skill Barrier: Customer does not have the skills to get the job done. For example, doesn’t have skill to create a website. Doesn’t have the skill to do financial valuations. Doesn’t have the skill to analyze big data. Doesn’t have the skill to manage accounts. Doesn’t have the skill to design marketing materials.
- Motivation Barrier: The customer knows how to get the job done but doesn’t have the motivation to get it done. Doesn’t have motivation to lose weight or doesn’t have motivation to study something that will help in career are obvious examples.
Startups have been using technology to lower barriers and bringing important solutions to customers. Some examples:
|Wealth||Wikipedia||Quality and Biggest Encyclopedia at zero cost|
|Khan Academy||Thousands of lessons at zero cost|
|Rent the Runway||Designer dresses and Jewelry at low cost|
|Oscar||Reduced Insurance Premiums|
|McDonalds||Reliable and Standardized low cost food|
|Walmart||Low cost retailer|
|AirBnB||Low cost hospitality|
|AWS||Low capex computing infrastructure|
|Time||Amazon||Shopping a click away|
|Uber||A cab appears in minutes|
|WordPress||Get your blog in seconds|
|Glucose Meters||Health monitoring at your convenience|
|Minute Clinic||Quick resolution and treatment of common non-critical diseases|
|Access||eBay||Access to items difficult to find|
|Netflix||Access to movies and television content|
|Charles Schwab||Access to top funds|
|Lending Club||Access to lenders|
|Kickstarter||Access to donors and patrons|
|Access to information|
|Access to friends|
|Innocentive||Access to solvers across the world|
|Coursera||Access to top professors and universities|
|YouTube||Access to a wide audience|
|Tinder||Access to potential mates|
|Skill||Intuit||Easy tax preparation and accounting|
|WordPress||Easy publishing of thoughts|
|AWS||Easy access to infrastructure|
|Pregnancy Tests||Easy checking for pregnancy|
|Spreadsheets||Easy records and finance|
|Motivation||Top Coder||Play games and get recruited|
|FoldIt||Play and fold proteins|
|HopeLab||Play and fight cancer|
A lot of opportunities exist in drastically lowering each of the above barriers. Consulting, Education, Healthcare, Recruitment, Law, Philanthropy, Pharma, Venture Capital etc. are likely to be transformed.
Wealth, Skill and Motivation Barriers fascinate me particularly. Will elaborate on these in future posts.