In love with the problem!
“Fall in love with the problem, not the solution” is the tile of Uri Levine’s book and also his conference during Money20/20 this week in Amsterdam. As usual, Money20/20 is a great opportunity to meet thought leaders, not only in payments, but more global in the corporate environment and our society.
Besides all conferences, round tables and speeches about the technicalities of payments, Uri Levine focuses on entrepreneurship. He has good grounds to do so: Uri Levine was one of the founders of Waze (later sold to Google), of Moovit, and has been involved in hundreds of startups. As of now, Uri is active in a dozen startups.
Uri insisted on the need for a startup to find one’s product-market fit, probably one of the most difficult steps, and one in which most startups only progress through trial and error. To find the right product-market fit entrepreneurs should focus on the problem they are trying to solve, not on their solution, this way they will remain open to other options, to improving their development, etc. As long as this step is not sorted out, there is no point in getting any further. And the best indicator for product-market fit is to see customers coming back!
Subsequent steps will include defining the business model, develop marketing, sales, getting further funding, etc. Talking about major corporations of today, Google, Amazon, Netflix, Airbnb, Tesla, … Uri pointed out most of their success came in their second decade of existence. Why? Because they spent a decade sorting out their product-market fit, positioning, business model and more issues.
When it comes to fundraising, Uri, a VC himself, has talked with many other VCs about their decision-making process, keeping in mind VCs invest in one project out of a hundred on the average. VCs’ answers were unanimous, when they invest, their reasons are simple: “I like the CEO, I like the story.” And, of course, the story must be able to prove an efficient product-market fit! If creating a startup is a rollercoaster ride, obtaining funding is a roller-coaster ride in the dark, he said.
A key challenge, in the corporate as well as in the private life, is making decisions: most people don’t know enough to make decisions. Consequently, they make wrong decisions, or even worse, they make no decisions. This creates an opportunity for all systems that will support decision making process. Waze falls in this category for driving, Moovit for mass transit, and other startups in which Uri is involved provide information on other aspects: Fairfly on air fares, Pontera on investments, Refundit on tax free shopping, etc.
Getting back to the payment industry, Uri pointed out there are numerous opportunities to reach new markets, new users, bring new value propositions, which means so many opportunities for innovation.