What is a good reason to start a startup?

I finished school about a month ago. Not about; at the time of writing this, it has been exactly one month since I left the University. And in that time, I won’t say I’ve been lost, but I’ve hardly been found either. It just feels like standing at the edge of a cliff or a crossroads, a bridge, or whatever term you want to use, but the possibilities are quite literally endless. What does one do after finishing University? I left school and told myself, “This is the first day of the rest of your life”, but sometimes I just want to return to the old life.?

There is a certainty in education. Knowing that all you have to do is study hard and make good grades, you’ll graduate one day and be done. If only life were so easy. Sure, you could argue that all you have to do is play the same game you played in school in the job market, get promotion after promotion, and then you’ll retire and be done. Valid argument, except for the fact that the job market is infinitely more risky than the school system.?

“Study hard, and you’ll make good grades” doesn’t apply here.? You could be doing good work and still get laid off. For context, this year alone, 360 tech companies have laid off a cumulative 104,410 people. This list includes some of the best performers in History. At the beginning of last year, Microsoft laid off ten thousand people. Last month, another one thousand bit the dust. In the real world, a million things beyond your own efforts could see you succeed or fail. A frightening thought. This was what got me really invested in the self-employment game.???

If I’ll sail into the depths, then I’ll be damned if I’m not captain of my fate, I thought with a smug smile. The jury is still out on whether the decision was a foolish one or not. I have no idea how to start or run a business. Easy to fix, right? Read books, find someone running a business, and learn from them. I’ve been doing both things and then randomly got approached by a Startup founder just the other day.?

It was an entirely random event, and somehow, after a few minutes of conversation, he asked me if I wanted to work for his startup. I have to be as crazy as he is because I said yes. I have my doubts, of course. I told him of them. It was actually the conversation about the doubts I had that convinced him to reiterate the offer.? I’ve looked at the startup. There’s a brilliant team working on it, but for the life of me, I just can’t answer a straightforward question; “Why?”. Why does this exist? Maybe I’m not the intended audience for it, and that’s why I don’t know, but part of me always feels like businesses should have genuine reasons for existing. Real problems they intend to solve.?

For example, I laugh at virtually every new fintech project I see. They’re all trying to do the same thing; “make banking easier for the unbanked and somehow profit off that”. Whether they do this with loose KYC policies or quick and cheap loans, the problem is always the same. There’s a reason the unbanked are unbanked. The traditional institutions couldn’t find a way to make money from them, but you somehow believe you can. Sometimes, they even manage to sell the VCs on their dreams and receive millions in funding to keep burning cash on the altar of growth. But what happens when you run out of room to grow? This even ignores the fact that every startup that begins now will be competing with the startups that started last year and those with the ones who started the year before. How are you going to upstage Opay??

They know this, of course. The Fintech bros. They’re smart enough to know banking the unbanked isn’t it anymore. So they spread to find other problems in the consumer banking industry that they could solve. There’s a startup I’m a fan of that tries to distinguish itself by making it really easy to track your expenses and stick to a budget. Very useful for some people, and not something anyone is trying to do as well as they are. I don’t use the app, however. I’m a fan of the core messaging, but I don’t see any pathway to monetisation and don’t trust the founders not to sell user data to the highest bidder when times get tough. Even worse, I don’t think the startup is going to do the startup thing well- like the Twitter people have been saying, “Just because there’s a gap in the market, doesn’t mean there’s a market in the gap”.

Wale Edun says only about 5% of Nigerians have more than 500,000 Naira in their accounts. That’s about $350 at present rates. Needless to say, the problem with most people isn’t that they’re spending their money improperly. They just don’t have enough money coming in at all. If most of the country is excluded from your product by virtue of the economy, then your product has to exploit the few it does have access to. So you’d generally prefer to charge for your product, and it’s likely that those who can afford to pay already have so much money that they could hire a real person to manage their accounts. If they can’t, then it’s also likely they have so much money that they don’t need to track where every kobo goes. So we can see that the Project-client base fit doesn’t just work out. One small subset of the population would find such a product useful and even be willing to pay for it- University students. But unless this service costs virtually nothing to run, it would be hard to sell it to this client base at a profitable price.?

Now, back to the matter. The startup I got the offer from. In more explicit terms, the startup I work for. It’s called Storipod. No, it’s not a podcast app or something audio-based. It’s basically a microblogging site like Twitter and Threads, but it leans hard into the microblogging aspect by requiring you to make each post with less than 701 characters. Of course, you could chain multiple posts into a single thread inside the same broad story structure, but the experience was more stressful than I would have preferred. The reason for this character limit is that it makes its UI look a lot like the “Updates” section on WhatsApp. It’s like you’re viewing people’s stories on Instagram or Snapchat, but instead of pictures or videos, it’s people’s thoughts and what they have to say. Does that sound interesting to you? It does to me.?

But I think the project is making the same product-client fit error that our expense tracker made earlier. It aims to attract readers, right? People who actually read and not just “wannabe readers”. These people tend to have attention spans that last longer than 700 characters, so forcing them to flip the page every 700 characters would get old quickly. At this point in this post, we’ve amassed some odd 6,805 characters. That’s about ten pages. Imagine having to flick to the next page 10 times while reading it and have it cut out at very unfortunate sections since most people would be cross-posting. To be honest, it’s not the kind of user experience I would want as a reader. But then there comes the question, how would you make the idea better? Step 1 would be abolishing the character limit. It’s inconvenient for me as a writer, and I’d hate interacting with it as a reader. But the character limit is what makes the project the project.??

I just cannot figure out how this would work. I’ve taken the job, so I’ll be working on solving this paradox, so stay tuned for what we end up coming up with- top of my mind right now is some transitional features to give people a choice between an aesthetic, social media-esque view for when the mood strikes and the more tame view from E-readers that we all know and love. The other problem is competition. In this space, we seek to compete in Twitter, Threads, Medium, and Substack exist. Each of these has managed to thoroughly corner their section of the m market by offering some new functionality that the others don’t do as well. I just don’t know if we have enough to differentiate ourselves. Why use Storipod instead of Substack or Twitter? I’d be hard-pressed to find an answer.

This problem also got me thinking about startups and competition. You hear all the time on Twitter about this founder who founded this product to compete with this other product from some existing giant in the space, and I really can’t get with that speed. Competition, for competition’s sake, seems so pointless to me. If someone is doing an excellent job in the space and you can’t offer anything tangible to distinguish yourself, then forget about it. Just move on to something else. But then, we must talk about what ‘anything tangible’ means. For instance, what separates Google Docs from Word is that it’s free to use and makes collaboration with multiple people effortless. I exclusively use Docs for everything professional (I don’t know how long that will last with the whispers of Google using Docs to train their AI models, but we’ll see).

On the other hand, I use a different word processor for creative tasks like this one. It’s called Ulysses. It doesn’t necessarily offer anything that makes it better than Word and Docs. It’s also not free like Docs, so you could use that against it. I use it because it has a UI that leans into being useful for creatives. It makes it so easy to handle multiple projects at the same time.?

For example, here’s a screenshot of the screen right now:

If a cool UI is enough to distinguish Ulysses, why not Storipod? Who knows? I may just need time to get used to things. And then, before we leave, there comes the other idea I had. A chess startup that approaches getting better at chess in a unique way. Everyone rants and raves about how AI and LLMs could be the future of education, but imagine having an AI Chess Trainer. It could adapt to each user and give them precisely the tools and suggestions that they need to get better. However, it would have to compete with both Chess.com and Lichess. Do I want that mental stress? Not necessarily. There’s also the fact that, as a beginner coder, I haven’t the faintest idea of how to get that to work. I mean, I have a vague idea but no pathway to implementation. I’d probably approach it by integrating Stockfish or Torch for the Chess knowledge since Stockfish is good at simulating performance across different strength levels. I’d also have to port in one of the established LLMs to communicate the training suggestions to users. Probably GPT 4-o since multimodality is practically essential. The only issue is that I have no idea how to do either of those two things or even build the app to take advantage of those things in the first place.?

I also don’t know for sure if a market exists in the gap. I’d have to steal users from the two giants in the space. I’m not particularly flush with cash, so I’d need investors, and then I’d have to charge for the service to be profitable. The lure of personalised training probably means I’d be able to charge as much as Chess.com does for their own basic training programs, but how many users could I reasonably expect? Also, what happens when the giants see what I’m doing and do the same thing in their apps? Reminds me of this video MKBHD made recently. In his video, he argued that not every product is a product. Some products are just features that competitors could easily integrate. Think about Snapchat stories and how Instagram stole that, or how Instagram and YouTube copied short form algorithmic content from TikTok with? Reels and Shorts, respectively. This startup, in my mind is very much a feature and not a product.?

Now, that’s the end of my thinking on the matter. I didn’t conclusively answer the question, but we can always leave that for later. All I can say is that It’s best not to make a business until one has clear market research and a pathway to scale.?