99 Startup Problems: the initial ideas that inspired the biggest companies in tech

There are a bunch of common myths about startups:

  1. That startups don't need to start with a problem.
  2. That startups don't need one initial customer segment to focus on.
  3. That startups can serve multiple use cases that solve multiple problems for multiple customer segments, all from the very beginning.

In my opinion, all three of those statements are false in almost every case.

Every giant tech company you know today started off with one important problem felt by one specific customer segment. Nailing that initial problem for that customer segment is what allowed them to scale to other products, additional use cases, and new customer segments.

Here's the proof → I spent over 100 hours trawling through old interviews, press releases and pitch competition archives to find the very first time each founder talked about the problem they were solving and for who.

1. Facebook

Founded: 2004

Valuation: $914 Billion (source)

Customer: Ivy League University Students.

Problem: You couldn't find and connect with your friends online.

Quote: "You could find music; you could find news; you could find information, but you couldn’t find and connect with the people that you cared about, which as people is actually the most important thing. So that seemed like a pretty big hole that needed to get filled." — Mark Zuckerberg on Freaknomics podcast, 2018 (source).

2. Stripe

Founded: 2010

Valuation: $95 Billion (source)

Customer: Developers at early-stage startups.

Problem: Accepting payments online was stupidly complicated to set up.

Quote: "In early 2010 John and Patrick began working on Stripe together. At the time Patrick was working on several side projects and they debated why it was so difficult to accept payments on the web. They sought to solve the problem and see if it was possible to make it simple - really simple." — Startup Grind interview, 2012 (source).

3. OpinionX

Founded: 2020

Customer: Product teams at scaling tech companies.

Problem: Roadmap prioritization is based almost entirely on internal assumptions, as product teams have no data to inform things they haven't built yet.

Quote: "80% of features built are rarely or never used, totaling almost $30bn in waste at public companies alone. If you look at how product teams decide what to build next, you'll find spreadsheet frameworks full of assumptions. Teams need real data on user priorities and sentiment if they're going to make well informed prioritization decisions. So we built OpinionX to help get them that prioritization data" — OpinionX Co-Founder Daniel Kyne (aka me, OpinionX isn't one of the biggest companies in tech just yet, but it will be eventually 🚀), July 2021.

4. Instagram

Founded: 2009

Valuation: Acquired by Facebook for $1 Billion in April 2012.

Customer: Amateur photographers already on social media (source)

Problem: Mobile photos looked crappy, they were time-consuming to upload and difficult to share with friends.

Quote: "You assume that you know exactly what you're going to tackle and the hard part is finding [and] scaling that solution. It turns out that the hard part is actually finding the problem to solve. Solutions actually come pretty easily for the majority of problems. So what we did was we listed out these five problems and the top three that we circled were (1) that mobile photos don't look so great ... (2) uploads on mobile phones take a really long time ... and the third problem was that we really wanted to allow you to share out to multiple services at once." — Instagram Co-Founder Kevin Systrom, Stanford lecture, May 2011 (source).

5. Intercom

Founded: 2011

Valuation: $1.275 Billion (source)

Customer: Other startup founders.

Problem: Customer relationship management was impersonal and disjointed.

Quote: "Facebook and many other tech companies were building their own messenger services [in 2011], but the customer-facing chat tools on websites still connected you to a faceless representative, often outsourced, conveniently named “John” or “Mary." More likely, you’d get referred to a nameless email account and become a ticket number. It felt a little gross.” — Co-Founder & CEO Eoghan McCabe, Forbes interview, 2016 (source).

6. Hubspot

Founded: 2006

Valuation: $24.56 Billion (source)

Customer: "Marketing Mary; a marketing manager who worked in a company of between 10 and 1000 employees." (source)

Problem: SMBs don't have the internal expertise to build their own marketing-tech stack.

Quote: "Their problem was not a dearth of tools. The issues SMBs had was like, 'I'm a 20-person consulting company, I don't know how to take wordpress and hook it up to Google Analytics and all this. I just can't do that." — Hubspot Co-Founder Dharmesh Shah, SaaStr Annual Conference, July 2017 (source).

7. Klarna

Founded: 2005

Valuation: $45.6 Billion (source)

Customer: Swedish eCommerce companies that Co-Founder Sebastian Siemiatkowski had worked within a previous job.

Problem: eCommerce companies struggled to secure their online payments.

Quote: "There was really a void to fill. This was before e-commerce had really taken off and a lot of people still viewed [online shopping] as very insecure - so if only that could be solved e-commerce was set to take off. Klarna took care of billing for the e-commerce companies and also made sure that private customers were given the opportunity to pay by invoice. In a nutshell: safer and more effective internet shopping." — Klarna Co-Founder Niklas Adalberth, Business Insider Nordic interview, May 2016 (source).

8. Instacart

Founded: 2012

Valuation: $39 Billion (source)

Customer: Working professionals in San Francisco without a car (source).

Problem: Grocery shopping is a time-consuming and inefficient use of time every week.

Quote: "One thing that has been with me for as long as I can remember is the pain of grocery shopping. I have dreaded going to the grocery store. Once you get there, you have to circle through the aisles to find the items that you're looking for, then you have to wait in line to check out and then lug your groceries back to your apartment only to realize that you've forgotten something at the store. This was 2012 and we were buying everything online, but the one that all of us had to do every single week in the most inefficient means possible was [grocery shopping]." — Instacart Co-Founder at Y Combinator Startup School, June 2014 (source).

9. Telegram

Founded: 2013

Valuation: $40 Billion (source)

Customer: Security conscious smartphone users (tbh, pretty broad from the start).

Problem: Online messaging is dominated by companies with commercial and political ties that place sensitive end-user messages in potentially compromising and insecure situations.

Quote: "In 2012 my brother and I built an encrypted messaging app for our personal use – we wanted to be able to securely pass on information to each other, in an environment where WhatsApp and other tools were easily monitored by the authorities. After Edward Snowden’s revelations in 2013, we understood the problem was not unique to our situation and existed in other countries. So we released the encrypted messaging app for the general public." — Telegram Co-Founder Pavel Durov, Dazed Interview, April 2015 (source).

10. Databricks

Founded: 2013

Valuation: $28 Billion (source)

Customer: Data engineers and data analysts at large companies.

Problem: Big data processing engines like MapReduce were too inefficient for the rapidly growing data lakes of the late 2000s.

Quote: "I first began Spark in 2009 to tackle the machine learning use case, because machine learning researchers in our lab at UC Berkeley were trying to use MapReduce for their algorithms and finding it very inefficient. After starting with this use case, we quickly realized that Spark could be useful beyond machine learning, and focused on designing a general computing engine with great libraries for building complete data pipelines. Databricks offers a cloud service that makes it easy to deploy Spark applications and work on data collaboratively in a team." — Apache Spark creator and Databricks Co-Founder Matei Zaharia, May 2015 (source). (Matei created open-source platform Apache Spark as well as its commercialization vehicle Databricks.)

For the rest of the list, check out → 99 [Startup] Problems: The Initial Problems That Inspired the Biggest Companies in Tech.

Let me know what you think (and if you have any favourites)?

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