Why Domain Experience Matters When Identifying Real Problems to Solve
Another beautiful Saturday morning in North Carolina and while sitting out in the backyard, I spotted an article in WSJ about how a group of ex-FCC executives were investing/participating in a startup called RapidSOS https://twitter.com/rapidsos?lang=en. What struck me about this startup versus many others is the real problem they are seeking to solve and how the engagement of industry experts as investors clearly highlights the potential of the company and what they are trying to do to solve it.
I listen to a fair number of business pitches. As most who know me will attest I tend to focus on the people involved in the venture versus the product/market side of the equation. Generally I look for people who have found a real problem and are looking to solve it. Even when the founders dont have direct domain knowledge I look to see if they have engaged as advisors or investors people who do have deep domain expertise. This helps to validate the problem, the solution and the team’s approach in the market. Don’t get me wrong I think the founders must have passion and vision as well but next to this having domain expertise really really helps.
Another example of this is a company I met with this past week in the industrial sensor space. The founder comes from a background in product development and sales in industrial automation technology. The CTO has a long history of making things work in tech. Together they seem to have formed a great team and more importantly they identified a problem in a space most know very little about. Their domain experience is guaranteed to help them avoid making mistakes that someone without deep understanding of the sector would likely make.
In the case of the RapidSOS founder while he didnt have direct domain experience he had a deeply personal experience that identified the problem set in his mindset. He then quit his job and went to Harvard to explore the idea. He used that time to enhance his domain experience around the problem and began to iterate through ideas around solutions. He then went on a roadshow with his first solution and talked to people in the industry to see what they would say. He sought out the people who could give him deep understanding of what would and would not work and then he iterated again. I’m confident he also used this time to build his reputation within this expert pool of people and this is what led to people like the past FCC chairman to invest directly in the business.
Comparing this with some of the business plans I saw at a business plan class assessment I did this past week I probably did not do those students a proper service by telling them to either get jobs in the industry they are exploring problems in to better understand the industry, the problems and the potential solutions or get really close to the right people in the industry and gather the knowledge from those people until you become a domain expert. If any of you are reading this now this is what I should have said to ensure you the best opportunity for success.
Enjoy the weekend!