What you really want to find are the 25 million dollar problems that you can turn into a monopoly. Sure you won't ever be famous, but you will have a great lifestyle that is 99% of what a billionaire has on the upside with none of the downside.
These stories are often kind of boring. Who wants to build (or read about) a CRM for life sciences companies? Fortunately for Veeva shareholders, there was a founder who wanted to go after this $6B opportunity.
Or Guidewire Software, which powers insurer's ability to underwrite and turned a modest $29M in VC into a near $3B business.
In my post, I found 15 companies that I categorized under the heading "Blessed are the Boring." These are companies that build software to automation injection molding quotations, construction management, corporate event messaging, and have done quite well as a result.
https://techcrunch.com/2017/07/01/invisible-unicorns-35-big-...
It would be good if more startups studied their examples, rather than reading yet another profile on Elon Musk or Jack Dorsey.
Definitely not. Boring is subjective but people who can't understand this kind of success have no business being in business.
I mean I can understand you need a 1B company if your going to be building rockets or autonomous cars but I would imagine this doesn't apply to 99% of founders.
Sure, but how do you do that? There's lots of textbook stuff (patents/copyright/trademark, consumer habit etc), but in practice, you must continuously improve it, promote it etc, to keep that "monopoly".
There's no monopoly; only temporary monopoly. [But I'm interested to hear your thoughts]
Imagine you've got a warehouse automation system (this is not an example of a $25 million dollar business, just an example of a problem that has no simple solutions) that is ten times as efficient for employees as the current pad-and-paper solution. If you arrive first and lock in that industry with the market leaders in owning warehouses, you don't have to worry about a competitor coming along five years later with a system that is eleven times more efficient than pad-and-paper and that costs 20% less than your system. It cost the company a half a million dollars to train all of their staff to use your system. It'd be crazy to migrate.
So...not a monopoly, but a comfortable lock on a significant portion of the market.
I understand the point you're trying to make, but that was a terrible example. Even then, I don't agree with the answer. Complexity isn't a deterrent to market, otherwise some company would have locked up international import/export by now. The market's response to complexity isn't typically a monopoly but rather very fragmented hyperspecialization (which is the case for both international import/export and warehouse automation).
What people are suggesting here is very well studied in economics: it's called a natural monopoly. And suggesting that you just focus on building a natural monopoly is about as facile as suggesting you just become a billionaire. Building a natural monopoly takes a mountain of time, money, and expertise. It's way harder to build a natural monopoly than it is to build a $1B business that has to compete.
And, as I said above: It's not a monopoly. But, it is a comfortable place to exist profitably without a lot of risk of losing your customers.
Also, you've wholly missed my point about complexity. Some problems are hard because of external, uncontrollable, unpredictable, complexity. Import/export is that kind of complexity. I'm talking about predictable complexity. Again, to come back to warehouse automation as an example, which you hate, but makes my point. A warehouse has a lot of moving parts (people, machines, inventory, shelves, whatever TF), but it is finite and is a mostly closed system. The inputs and outputs usually match up, and you can predict what's going to happen with ins/outs and all the people and things that make the things move in and out. It is complex because it is large and there are a lot of people involved and many of them would need to be trained to use any new system that automates it. It is not, however, chaotic, and involving many competing factions, like import/export.
This might be included as "installation" costs, along with and engineering integration with other information systems, Related is the organizational purchasing process, expensive for larger transactions: determining requirements, evaluating alternative vendors and solutions, sign-off from legal and upper management, and so on. Change itself is disruptive, there'll be teething problems, other systems will have to adapt, and other knock-on effects apart from training itself. These are one-off costs that you'd prefer not to incur again, unless there's a very large benefit (your example of 10x is worth it, but not (11/10)x).
All are switching costs.
From a lifestyle perspective it is much better to be a small fish in a small pond than a big fish in big pond filled with sharks.
Finding anything more than vague ideas requires connections and the other person not knowing the value of being able to describe their problem (otherwise, why wouldn't they just learn programming and build something themselves?).
However, that's not something that is solved purely by capital. It also takes a lot of time (in practice, you need potential customers to describe their problem multiple times over multiple meetings, since what they think they want, what you think they want, and what really solves the problem take time to converge). For our company (applying ML/NLP in the customer feedback domain), finding domain experts willing to contribute their guidance took a while, but has been one of the most important things we've done.
Customers absolutely need iterations to think things through. In fact, that's my default approach now because trying to get everything right for the first meeting is extremely unlikely. Capital does buy you time and iterations.