Aspiring startup founders often ask themselves, “How does a person get an insight into a really big problem that needs to be solved?” This is an important question in the context of what’s called Category Design. If you are interested in creating an entirely new category (market), we recommend you read the book, Play Bigger: How Rebels and Innovators Create New Categories and dominate Markets.
Many times the insight occurs when a serendipitous event puts that problem on stage in a way we can’t ignore. The combination of the event with a person’s domain knowledge can make this revelation click in a big way.
Legendary guitarist Les Paul had such an event. He was playing his guitar and playing harmonica in the parking lot of a barbecue joint one night when a patron came up to him and said, “I can hear your harmonica okay, but I can’t really hear your guitar.” That got Paul to thinking about how to create a louder guitar. And the rest is history—the modern-day electric guitar (and of course, Gibson’s Les Paul electric guitar).
Inara’s Category Design began with Streaming Ebooks Micropayments & Tokenization. At Inara, we have tons of domain knowledge and experience in the book publishing industry going back pre-digital in traditional publishing (with New York publishers).
My serendipitous event was an accident that happened when I crashed on my racing bicycle going too fast around a corner. Several weeks in recuperation gave me time to discover that my own publishing company’s New York-published books (I already had the rights back), could have new life on ebook publishing platforms. Authors could have a new way to earn money with their books going with self-publishing on these digital platforms.
Years later, another market insight happened to us. Micropayments and pay as you go. The tech insight came soon after with the Hedera announcements of the Hedera Consensus Service and micropayments capability. The concept of micropayments for “Authors 3.0” had already been validated by thought leaders in the indie book publishing industry who had begun to embrace blockchain (Distributed Ledger Technology) as stated in their blog posts and white papers.
I did a series of “lean startup” interviews with readers and authors in our network and ecosystem. Probably talked with more than a hundred people. I found a lot of dissatisfaction with the alternate fixes for both the reader discovery problem and the author revenue and “connect with and retain the reader” problem. Authors in our network said, yes, you build it and we will join you. And they have.
In 2020 Inara completed the Hedera Boost startup program. In July 2021, we started collaborating with our friends at Dropp and we invented Auto-recurring Micropayments. “Only pay for what you read, one page at a time, and when the page turns, the author earns.”
So once you have identified the problem—“The Missing”—then the technology has to be there to provide the solution. And conditioning of the market you are creating, begins.
It’s an ongoing process that starts from the moment you get an idea, form the hypothesis for the problem to be solved and then get out there with conversations and mockups and POCs. Ash Maurya says it well: “Build something people want” and there’s the rub. You can do your due diligence. prove out your hypothesis until the cows come home and still fail. Again, timing is not everything, but almost.
Our process has been far from perfect. We have made mistakes and experienced failures. But as one wise person said, “Failure is a feature, not a bug.”
Sometimes when you get a market insight into a problem, especially when people don’t even know they have the problem, validation can be extremely difficult at first, if not near impossible. In that case, some attempted forms of validation can be counter-productive. Steve Jobs, a natural-born category designer, didn’t “survey” users for the iPod, the iPad, and the iPhone.
He had an uncanny sense of what people needed, he saw a “missing” and designed a category, a company, and a product to fill in that “missing.” He delighted consumers who weren’t expecting these experiences. Oh, and he had superb timing in doing so (although his Newton PDA was a flop, remember that one? The timing sucked).
Knock on wood, Inara’s timing is excellent. The ways we—as consumers—want to access, discover, and choose the content we use, and how we use it, is going through rapid transformation as technology makes exponential leaps. Web 3.0 is the spearpoint of that transformation. And now we have new opportunities for content ownership with NFTs—a whole new world (yes, and the Metaverse) yet to be explored.
