Hey – you suck!

People often think that to start a business you need a big idea. You need to spot a gap in the market and create a brand-new product to meet it. This is not the case. One of the easiest ways to start a business is to look at something that people need that is just being done badly. Look at something where the existing suppliers suck. Maybe the product sucks, or the customer service sucks, or the existing suppliers have just got lazy and complacent. 

This is what Richard Brason did – he looked at industries where the customer service was poor and where he thought he could win by doing a better job. Paul Graham, who funded Airbnb, Reddit and Stripe, advises entrepreneurs to look for something people are trying to do or doing badly and figure out how to do it “in a way that doesn’t suck. “ In my recent podcast with @ Rupert Lee Browne he talked about he wanted to provide an international remittance transfer product when the experience wasn’t as awful for customers as it was then 🎥 YouTube: https://lnkd.in/dtDDUg2R🎧 Spotify: https://lnkd.in/dpaHjRrQ he simply wanted to provide a technology based better customer experience.

You don’t need a big idea as the world is full of good ideas. You just need great execution. As everyone is aware, one of the biggest revolutions in history is occurring right now as AI and Gen AI totally transform businesses and the capabilities of individuals. There are two reasons that this is perfect for starting a bootstrap business.

In the book, The Second Machine Age, Erik Brynjolfsson and Andrew McAfee make the excellent point that the invention of electricity did nothing for manufacturers for decades.  Initially, factories that had previously been organized around a central power source like a water wheel continued to be laid out the same way, without any change or radical improvement, so initially the advent of electricity brought some but marginal  progress. Eventually manufacturers realized that electricity enabled them to completely reorganize their factories, and gain significant and radical efficiencies. 

In the last twenty years, it has been similar with digital and it will continue to be so with AI and Generative  AI.

Think about banking.  Initially, it was done in a branch, then by phone, then online, and now digitally with smartphones.  Thanks to the challenge of fintechs, digital banking has now advanced considerably, but initially, all that happened was that the same methods that were appropriate for the branch were made available digitally. 

There was no digital reengineering of the process.  Everything you did in the branch, you now did precisely the same way online with the same processes and speed but just via a different channel.  Banks didn’t offer any new processes or ways of doing things. There were some marginal improvements in speed and ease of use but nothing radical.

This allowed an opening for fintechs to exploit by creating something completely new, just like the factories that reorganized themselves once they had electricity.  It’s taken a decade but we are now seeing the results of that with Revolut, Monzo and the like starting to gain real traction and steal market share.

This is happening again with Gen AI.  We are in phase 1 of the disruption and the existing process is being speeded up or the cost is being reduced by replacing it with AI.  As Gen AI’s capabilities continue to develop and grow at a breakneck speed there is literally almost no area of business that is not ripe for disruption and this already creates huge opportunities. But we are also entering phase 2 of the disruption where the entire process can be re-engineered given Gen AI’s capabilities.

Every single process that is still not fully digital or is not yet AI enabled is up for grabs. From the product design and product delivery time, all the way to the customer experience, there are huge parts of our society and industries where the current and traditional suppliers suck. Any would be founder should be rolling their sleeves up with a huge grin and looking at where they want to play and how they can re-engineer to provide a superior product, solution or service.

The other huge benefit that AI brings for bootstrapping is that it removes the need for funding. Whatever the rights and wrongs of taking on funding (and I admit to being biased against it as I’ve outlined in earlier blogs) one of the main uses of that funding is employing people, human beings, to help you build a business.  Increasingly you don’t need to do that. There are some core skills that you need as outlined in last week’s blog ( Remember the three-headed dragon | LinkedIn) but lots of the basic to medium level skills can already by done by Gen AI and soon lots more will be too. Need some programming for some software, some sales or marketing collateral, need an exec assistant, want to build a website, someone to manage expenses and do cashflow forecast- all of this can already be done by Gen AI.

It’s ironic that at the exact moment that the global amount of VC funds sloshing around has grown to its largest ever- apparently it’s now close to half trillion- we at the same time have arrived at appoint in history where there is the least need for it. It will not be long before the world has its first billion-dollar unicorn with just one person – its founder – and everything else done by AI.

While AI clearly can help bootstrappers you don’t need an AI based solution to launch a business. As I said at the start there are lots and lots of areas where existing players have got lazy, complacent or just flat out provide a bad experience or product because up to now they have got away with it. So, to anyone out there thinking about starting a business and bootstrapping, just have look around, see where someone is doing something that sucks and go out and do it better!