Find a Problem Worth Solving for Startups in Small Countries
Written by
, the CEO & Co-founder of CoobyI have a typical immigrant story: I built my career in Silicon Valley after moving to the U.S. from our motherland, Taiwan. I worked at Facebook, Dropbox, and other tech startups in the valley. I never had a “real job” in Taiwan, but I decided to move back and start a company there along with my co-founder,
.Our dream was simple — to build a global software startup from Taiwan. That’s where we deviate from a typical Silicon Valley story. But I believe a lot of immigrants have similar dreams. Many of us want to bring what we’ve learned back to where we came from and create value for the regional ecosystem.
Since the founding of Cooby in November 2020 and raised fund from Sequoia, Pear VC, and Hustle Fund, we’ve learned many, many lessons about starting a global startup from a small country (“home court”).
This article discusses our learnings in the early stages (Pre-Seed through Seed stage). Let us know what you think. Or even better — tell us what you would have done differently.
No matter where your startup is located, the first step is always to discover a problem worth solving building (“Problem Discovery”).
Having a small home court offers you unique advantages in some ways, but handicaps you in another. And there are mouse traps you might fall under that could be fatal to your startup.
👀 Here’s what we’ve learned:
Problem Discovery is where you’re at a disadvantage. It’s inevitable that you’ll find more customers to talk to locally, so you’ll be tempted to look for local customer insights. But that most definitely won’t work. Your growth will be capped at the local market.
❗️ “Starting with your backyard” is wrong
We first decided to “start with our backyard” and we focused on building a CRM for insurance agents in Taiwan. We discovered two main problems with this choice:
- Our product became too localized. It only worked in Taiwan because we integrated with LINE, which is used in very few countries.
2. What’s underserved in a local market is often a solved business problem in the global market.
For example, many companies in Taiwan don’t have a CRM, but there are a lot of great CRM solutions in the global market. It wouldn’t make sense to build a clone of existing global CRM solutions. Instead, a better approach would be to create a reseller business and localize the global CRM solutions available. But a reseller usually is not a VC-fundable business due to its limit in scale.
The second drawback is obviously a much bigger risk than the first. Something to watch out for.
After that failure, we soon pivoted to a product that targets the global market and identified unique positioning, which is critical but oftentimes overlooked.
🌎 Discover a global problem
Every startup has to solve a unique massive problem. For startups based in a small country, the problem you solve can’t be domestic, unless the domestic market is large enough (over $1 billion). It’s not as simple as “We will solve this for Small Country A first, then sell it to Big Country B, and Big Country C.” Even before you build anything, you have to apply First Principle thinking to discover customer insights in these countries — with first-hand information acquired by talking to customers directly.
Don’t think by analogy. Don’t infer insights. Don’t rely on top-down market research. The point here is to have a lot of firsthand conversations with people that fit your ICP (Ideal Customer Profile).
How to do that? We didn’t do it well either, at first. We relied on product launch sites to generate interest. That’s a big no-no. Here are the reasons why:
- You can’t pre-launch your product on launch sites. So you can’t get customer insights before building the product.
- Their audience is niche. Most are tech-savvy entrepreneurs, designers, engineers, product people, etc. They weren’t a fit for us.
So, we learned the lesson and changed our strategy.
What did we do right from that point on? There are a few things we improved on:
🎯 ICP validation framework
We adopted the ICP validation framework from sales consultancy firm JJELLYFISH (follow Jen on Twitter). It’s a very rigorous and well-structured framework, but to boil it down, the framework helps founders write really well-crafted cold emails to their ICPs, and ask consistent and specific questions via email or calls to validate a problem statement, with 3 criteria:
- Do they agree it’s a problem?
- Can they articulate what the problem prevents them from achieving?
- Have they tried to find a solution unsuccessfully?
You don’t need existing connections or sales to do this. Founders can do it on their own. (They have to.) In our process, we invalidated a few problem statements that we would think were valid otherwise.
🖥 Product-led approach
We took a product-led approach to build an audience. That means instead of spending money on marketing, we decided to try building something small with good viral potential in order to build an audience.
Again, we didn’t succeed on the first attempt. We built an analytical report for WhatsApp, but it didn’t gain any traction.
Next, however, we built a Chrome extension that went viral in our target markets. We’ve since been showered with user love, and luckily, because of that, we’ve gotten to talk to a lot of people with great profiles. These high-profile folks are busy professionals, but they hop on a call with us because we’ve shown them good products. Then, we ask each one of them to introduce us to more connections. That has worked really well too.
📣 Build your audience early
It has become the norm for startups to build an audience as early as the idea stage. How does that work for a typical startup in Silicon Valley? Typically, you would put up a pre-launch website with a waitlist sign-up. Then, you start building the waitlist by blogging, doing PR, aligning key influencers to share on Twitter, promoting within relevant communities, or simply focusing on organic search inbound traffic.
Then, as you design and build the beta version, you have a few hundred people to talk to on the waitlist. This is especially useful for consumer or “prosumer” products. This approach could be super helpful. If your first beta doesn’t work, you can tweak it before sending it out, so the interest won’t completely fade away.
The reality for startups based in a small country is that many of the aforementioned tactics we’ve talked about here won’t work. For example, it’s costly to generate PR across countries. One thing that has worked for us is to put up landing pages with a “contact us” button as soon as we have an idea. High demand means there is a consistent influx of leads without any SEO. We let the people see mocks, and convert them to paid pilots, even before the product is built.
In Conclusion: The Founder’s First Job
A founder’s very first job is problem discovery. You can’t delegate it to any founding team member. You can’t outsource it to a market research agency. The problem that needs to be solved determines the company’s overarching narrative. Only founders have the authority to define that narrative. Here’s our narrative.
Wanted to nerd out on narratives? Read our narrative here:
After problem discovery, the next step is to solve the problem with a solution you build and sell. I’ll talk about that in a future post.
