Defense Against Hype: Asking “What’s the Problem?”
Consider the following headlines:
“$232 Million: Tezos Blockchain Project Finishes Record-Setting Token Sale” [Coindesk]
“China tech emerges as the global hotspot for VC capital” [FT]
“Disney Joins AR Fray With $200 Star Wars AR Headset” [Forbes]
Whether or not these are true or hype isn’t the point. It’s the gut reaction they incite — that is surprise, fomo and/or greed. All too often we tend to jump into “opportunities” without peeling back the layers and asking why these are opportunities in the first place. The decisions one might make based on the above are: 1) Let’s invest in the next ICO, 2) Let’s do a startup or a new fund in China, 3) I should go join an AR application company.
This is a hazardous way of thinking and making decisions. I would hypothesise that the vast majority of people who bought into the latest wave of cryptocurrency ICOs have no real understanding of the problem that these cryptocurrency platforms are trying to solve.
I’ve learned from startups that behind every sustainable opportunity is a real problem. This problem is something that is a pain for a set of users. The opportunity is the best solution to this problem, and in order to judge what “best” is, you need understand its alternatives. Finally, you need to know why you should be the one to either invest in or build this solution (i.e. personal experience, professional background, network, some other unfair market advantage). The last step takes self awareness, honesty and humility.

If the problem, solution, and you aren’t aligned, then you have three options: 1) turn away, 2) learn more about the problem or solution, 3) do it anyways. It’s fine to go with option 3 but know that you’re speculating and have not done your best minimising your downside risk and are merely hopeful for significant upside gain.
The next time your instincts tell you to go for an opportunity, stop and ask yourself this simple question: “what’s the problem?”. It’s a good start.
