Building a business by solving your own problem

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I’m a sucker for startup origin stories. They can tell you a lot about both the founder and the venture. As a mentor I usual start off meetings asking what prompted the founder to start their venture. But the origin stories I like the best are the ones where the founder is trying to solve a problem that they themselves experience. Then the question becomes how many other people have that problem and can a business be built on providing a solution. The article on CNN Business by Michelle TohThis startup helps you find any place on the planet without an address is a great example of such an origin story.

The story of London startup what3words begins with what3words CEO Chris Sheldrick, a former live music organizer. Sheldrick often grew frustrated at poor addressing when he needed to drop off equipment at a convention center or direct a band where to go, Jones said. I had this problem myself when I worked in the sound reinforcement business and often had to struggle to find the right place to load in our equipment at an arena or concert hall. As Giles Jones, the company’s chief marketing officer put it, “Everybody’s got a story of where location has not been good enough.”Addresses “either didn’t exist, they weren’t accurate enough, or they were really difficult to communicate.”

Sheldrick’s first attempt to solve the problem was using GPS coordinates, but the numeric combinations were difficult to remember or share with others. But he managed to cognitive leap about six years ago. “There was a dictionary on the table, and they were like, ‘I wonder how many different words it would take to build a system using words,'” Jones said.

By combining a problem he’d been living with for years, with the observation that a dictionary contains thousands and thousands for words, Sheldrick arrived at an answer to his problem. By combining about 40,000 words in groups of three you can map out specific building entrance, such as at a shopping mall. The company divides up the world into 57 trillion squares, each uniquely identified by a three word address.  The app then opens up another mapping app, such as Google Maps, which then can direct you to the address.

Ok, so far we have a personal problem combined with a unique solution. But how does what3words make money? The app is free to use for the public and non-profits but the company plans to make money by licensing its code to businesses that want to integrate it with their systems. To quote Michelle Toh:

Two of what3words’ investors are logistics firms. Germany’s DB Schenker and the UAE’s Aramexare using the startup’s technology in their systems to help delivery workers know exactly where they’re going, a way to save time.

Other partners are using it to showcase new features on their platforms.
German automaker Daimler (DDAIF), another what3words backer, has adopted it in some of its cars’ navigation systems, letting passengers input three-word addresses by voice.
Another company, theSouth Korean messaging app Kakao,has used what3words as a way to invite users to discover new fishing spots that were previously off the grid.
It turns out that one of my mentees has a venture in the logistics business. I’ll be interested in hearing from him if he sees potential for what3words with his target customers.
There are a couple of interesting lessons embedded in the what3words origin story. While many successful startups might seem like overnight successes, in reality founders often live with a problem for years before finding a solution. Any they may try multiple solutions until hitting on one that works. The other lesson is more subtle: pay attention to your environment. It was observing the dictionary that led to the insight about using a unique set of words to define a location. You never know where a solution to your problem might be lurking, so keep your eyes, and your ears open!

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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