Matt Higgins, Co-Founder and CEO of RSE Ventures at the Relevent Sports International Champions Cup Premiere at a pop-up sale featuring memorabilia from Daniel Arsham and his company Snarkitecture, March 27, 2019.
Ira L. Czarny – Corbis | Corbis Sports | Getty Images
Lots of side hustles and businesses become profitable because they solve an unsolved problem or improve something that already exists.
If this seems easier said than done, there is a simple solution: study people who have previously solved other unsolved problems, millionaire and RSE Ventures CEO Matt Higgins said last week during CNBC’s Make It: Your Money virtual event.
“We all have within us the knowledge of how we can do something a little bit better,” said Higgins, adding: “The vast majority of game-changing companies are actually based on [those] observations.”
Higgins cited one particular billionaire as an example: Airbnb CEO Brian Chesky, who accidentally started his company while brainstorming in 2007 while thinking about ways to pay rent. Chesky and one of his co-founders booked air mattresses for strangers in San Francisco for a design conference.
While solving a personal problem, they realized that they had a viable business idea. As a bonus, they also solved someone else’s problem: travelers could stay in cheaper accommodations than hotels.
Airbnbs may not always be the cheapest option anymore, but as of Wednesday afternoon, the company had a market capitalization of $77.04 billion and, along with companies like Uber, helped launch the modern sharing economy.
In other words, you don’t necessarily have to invent a new product to be successful. Pay attention to your surroundings and ask yourself whether your solutions to everyday problems are replicable, Higgins said.
Chesky is not the only example worth studying: many other successful companies were founded in a similar way. Bumble CEO Whitney Wolfe Herd launched her dating app where women initiate all conversations with matches after noticing widespread frustration in those around her.
“I saw a problem I wanted to help solve,” she wrote in a 2020 letter on the Bumble website. “So many smart, wonderful women in my life were still waiting for men to ask them out…Despite all the progress women had made in the workplace and in the corridors of power, the gender dynamics in dating and romance still felt so outdated.”
This tactic also works for smaller companies. Gordon Ramsay-backed cookware brand Hexclad was founded because two collaborators thought they could produce a better-looking and more durable frying pan. CEO Danny Winer told Make It last month.
Technology marketplace Whop, which brings in an estimated $354,000 a month, was born out of a group of young friends who realized that another software marketplace was unreliable, co-founder Steven Schwartz told Make It in August.
According to Chesky himself, mentally reframing your goal from “create something brilliant” to “solve a problem” can help a lot.
“If we tried to come up with a good idea, we wouldn’t be able to come up with a good idea at all. You just have to find a solution to the problem in your own life,” he reportedly said during a 2015 conversation at New York University.
Meta CEO and co-founder Mark Zuckerberg agrees, saying in a 2016 interview with Sam Altman, then president of startup accelerator Y Combinator and now CEO of ChatGPT maker OpenAI, that most Silicon Valley founders build companies “backwards.”
“People often decide they want to start a company before they even decide what they want to do,” Zuckerberg said. “The best companies that start are the ones that are trying to create some kind of social change, even if it is local in one place.”
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