42% of startup founders don't know what a business is. Are you one of them?
Tags: startup, beginners, career
Published: 2020-05-21 16:15:47

_This post originally appeared at [makersway.io](https://makersway.io). It's the first one of an anti-bullshit series exploring how to properly build a digital product, going from raw idea to launch_ 

When you have an idea for a startup, ask yourself: who wants this right now? Who wants this so much that they'll use it even when it's a crappy version one made by a two-person startup they've never heard of? If you can't answer that, the idea is probably bad. - Paul Graham

Suddenly, you feel a shiver running up through your spine.

Immediately after, a reflex makes your head move: you've found something.

Quickly, you start doing the math: at least 10.000.000 people also share this problem that I have. If each one pays $10 for the product I have in mind... Wait. $10? 

__I-AM-THE-NEXT-BEZOS!__

All of this happens in an instant. It happens to all of us, all the time.

In this euphoric instant, you fast forward 20 years visualizing your future, getting almost high, as if you already have lived it.

During the next days (sometimes weeks or months, in the worst of the cases), that will go round in your head, keeping that idea safe as Gollum did with the ring for anyone to steal it from you.

You won't allow anyone to live the future you imagined.

Does this sound familiar?

We are humans, after all. We all have our dreams and hopes, and tons of them go through turning an idea into a great product and a successful business.

The bad news is that ideas are not as worthy as we all usually think. We all have incredible ones that are perfect in our heads (including yours).

The good news is that **this series of posts are going to help you evaluate and filter business ideas** as an expert founder.

This way you'll save weeks or months discarding the non-viable ones and invest your talent and effort in those that can become what you dream of.

##Execution has ideas for breakfast##

If you are serious about turning your side project/idea into a business or make a successful product anytime, there's something you need to tattoo on your mind right now:

_The execution of an idea is a lot more important than the idea itself._

How many times have you heard "oh, I thought about that billion-dollar business too some time ago"?

The truth is that the majority of successful products already existed, though usually in a different form.

What is Whatsapp, essentially?

Internet-powered SMS. One step further, BlackBerry Messenger for all platforms.

What is Google?

A better version of what Altavista was.

Let's go personal.

Haven't you dreamed about electric cars? Why haven't you started Tesla?

Haven't you thought about a photo feed with comments below? Why haven't you created Instagram?

We can go on for four hours.

And that leads to one of the biggest myths in the entrepreneurship world:

If I tell someone my idea, they are going to steal it from me.

The worst thing that can happen to you if you talk about your idea is that people usually project their insecurity about it, trying to discourage you.

But in the majority of the scenarios (especially if they are part of the target, more on this later), you'll gather valuable insights that your enthusiasm probably hid for you.

How can you know if you should discard an idea or give it a go?

First step: Understanding what is a business (that works).

##What is a business (that works)?##

No matter how much we enjoy doing our craft.

At the end of the day, whatever we are going to build, needs to provide a steady and growing cash flow. It has to has its value reflected in people exchanging money against the outcome your product is delivering.

If we makers want to keep doing what we love, we need to turn our creations into a business.

So, what's a business?

A business is what happens when someone pays for a product/service that solves a problem they have.

This definition that may look obvious to you is not that clear for everyone: [42% of startups fail because they don't solve any problem](https://www.cbinsights.com/research/startup-failure-reasons-top/).

Let's develop this a little bit:

Every business that works:

1. Solves a problem that a group of people has.
2. In exchange for a price they can afford.
3. Better than the existing solutions.
4. That provides an income source bigger.
5. Than the costs it incurs in to keep operating.
6. Every business you can imagine right now fulfills these conditions.

It's true that, especially in the tech scene, there are a lot of startups "subsidized" by piles of cash coming from VCs (i.e. your Uber Eats 50% discounts), hoping that at any point, it will be worth more than their investment. A declining trend, [in favor of the maker movement](https://a16z.com/2019/10/08/passion-economy/).

Why I'm telling you all of this?

Ten years ago, I raised €120k to start a company in the last year of college. I wasn't dreaming about collecting yachts. I just wanted to create something worthy. To make a cool and useful product.

Give shape to my dream job: code, design, business, marketing, and everything that involves building a startup.

But, after three years of hard work, I became one of those founders making that 42% ratio.

If I correctly knew what I just told you, I could have saved €31.250 and 6 months of work.

I'll explain to you the lessons learned for you to save time and money in the second post of this series. In it, I'll dissect each of those points, starting from the most important one:

How to truly understand a problem and the people that have it.