The Lean Startup movement has inspired many budding entrepreneurs to build great companies which solve real problems. It has been responsible for many stories of entrepreneurial passion, dedication, and ultimate success. This is one such story.
My Startup Story
I’ve always considered myself to be a dreamer with a pragmatic side. You know, someone who is insightful enough to notice the world’s problems, confident enough to take them on, and driven enough to solve them. As Churchill once said, “if you have vision you have seeds, if you have courage you have soil, and if you have drive you have water.”
I also knew that I have what it takes to build a great company that would make a real difference in people’s lives. All I was missing was an insight. Well, that and funding, a technical co-founder, deep knowledge or expertise in something, and luck.
In short, I was ready to take on the world.
The Wait Is Over
It all began while I was waiting for the elevator one day. As I stood there, annoyed at having to wait, it suddenly hit me: “I need to revolutionize the elevator experience for the common man!”.
I quickly did the math. An average US metropolis has about 4,200 buildings with at least one elevator. Each elevator on average serves around 2,800 people per day, which works out to over 11 million potential customers per city.
Clearly this was a large untapped market with unmet needs. And to uncover those needs I had to get out of the building and talk to real customers (well, technically I’d have to get into a building to actually talk to people waiting for elevators, but you get the idea).
The First Hypothesis
With my target market identified, I snapped into action. My original hypothesis was this: if people knew exactly how long they’d have to wait for the elevator, they’d sometimes opt to take the stairs. And they’d be willing to pay for the information.
Armed with my hypothesis, a chai latte, and a clipboard, I went to the lobby of a large high rise on the corner of 4th and Main. It was around lunch and there were plenty of people near the elevator.
As I began conducting my interviews, I noticed another guy with a clipboard asking people questions. I introduced myself and we started chatting. Turns out that this guy’s name was Jambone and he too was looking to start a company that would revolutionize the elevator experience.
Jambone and I immediately hit it off and decided to compare notes. Two observations quickly emerged. First, it turns out that people didn’t really care about much of anything when it came to elevators. They just want to take them to whatever floor they were trying to get to and move on.
The second insight was that people didn’t like to be harassed. More specifically, they didn’t like being interviewed by potential entrepreneurs. In fact, almost every person we spoke to expressed a sentiment best described by the following quote from Mindy D. (an advertising exec from Uptown):
“Are you kidding me with these questions? What the hell is going on here? I mean, I can’t walk down the street without being accosted by some jackass with a clipboard who is trying to revolutionize the school lunch or bike repair or who knows what. I swear to God, the next time I get asked if I’d be willing to pay for a subscription service to help me manage my time, I will lose it.”
“Hmm,” said Jambone scratching his beard “this is interesting. I think we may have uncovered an unmet need here.” “Yes” I responded with a sly smile, “I think you might be right.”
You know, as Ghandi once said “When one door closes, another opens”. Even though Jambone and I could not find a way to revolutionize the elevator experience, we knew we had stumbled onto something even better.
We decided to research the scope of the problem and what we found was startling. It turns out that, on average, people in large urban areas get hypothesis testing questionnaires about 5 times a week and spend a total of 8 hours answering them.
We quickly did the math. There are roughly 4 million people in an average urban area. Therefore, answering questions about hypothetical businesses ends up wasting over 1.6 billion hours or about 43 trillion dollars per year per city.
This was huge! If we had a product that could cut this even in half, we would be helping people save literally trillions of dollars. And that would make for a nice payday for us.
Armed with this insight, Jambone and I decided to join forces and pivot. Our new idea was to create a crowd sourced app that would pinpoint to the user areas of heightened hypothesis testing activity. The user would then be given an option to automatically re-route their path to avoid these danger zones.
The App Is Born
We quickly pretotyped the app (called QuestionMeNot) and started showing it to people. The response was overwhelming:
“This is great. Really great. Really insanely great. I mean, this will literally change everything.”
“Will I use it? Are you kidding me? Of course I would.”
“How much is this thing? You know what, scratch that. Here’s my credit card, just charge whatever you want.”
“I feel like I got my life back.”
“What do you mean this is a prototype? Where’s the real thing? Not built yet? When is it going to be ready? You don’t know? How can you say that? For the love of all that’s sane, please build it. Please…”
“Thank you… I don’t know what to say (starts sobbing)… I just… I…”
Yes, we had a hit on our hands. Within two days, we had multiple funding offers from VCs, angel investors, community groups, professional associations, unprofessional associations, actual angels, and multiple government agencies. Since neither one of us knew how to code, we hired a team in Ukraine to build the app. Our first release was three weeks later.
Things quickly snowballed from there. Our user base quadrupled every five days. Within a month, QuestionMeNot became the number one social app in every major app store. We made the cover of Wired, People, and The National Geographic. Our valuation hit $200M and we sold the company three months later.
A Happy Ending
As Boutros Boutros-Ghali once said “You don’t need to know much to make money”. As it turns out, he was right. Jambone and I didn’t need a technical co-founder, or deep knowledge or expertise in anything, or even luck. All we needed was an insight and a disciplined process to uncover a true need. Thank you Lean Startup!
You may also like:
Did you love / hate / were unmoved by this post?
Then show your support / disgust / indifference by following me on Twitter!