Author: Zhivko Todorov, Account Associate, Endeavor Bulgaria
A common misconception, emerging lately, is that entrepreneurship is all about having that cool idea, that turns into a billion-dollar company. And some of the recent social/entertainment apps actually make it seem that way. Those, however, are the exceptions. Entrepreneurship is actually about solving problems. Problems pressing enough, that your customers would be willing to give you their money.
What your customer actually needs vs. Your assumption of what the customer needs
Every (starting) entrepreneur has that idea, which is heavily based on their assumption of what potential customers may need. And a very common mistake is being adamant about those assumptions, not changing it along the way. The key is to test those assumptions early on, and gain actionable insights through customer feedback. The idea is very well established into the leading “lean startup methodology”. Test and (in)validate assumptions as quickly and as early, as possible in a “build-measure-learn” loop.
Creating a product based on customer feedback
Sounds great in theory, doesn’t it? Let’s see a practical example of this notion.
At Endeavor Bulgaria we screen hundreds of companies every year, to eventually work with a handful of the most-dynamic companies and entrepreneurs, on their way to global scale. Our latest portfolio company is the perfect incarnation of this problem/solution mentality: Tiger Technology, led by Alex Lefterov, a serial entrepreneur with a background of solving complex technical problems for over 25 years.
Tiger Technology started all the way back in 2004 by creating much-needed storage and collaboration solutions for the Media & Entertainment industry. With a growing M&E industry screaming for help, Tiger Technology quickly established a solid presence, being among the first movers in the market. Few years later, storage technology advancements, stale M&E industry, and market saturation meant Alex and Tiger Tech had to find other ways to grow.
Fast forward to 2016, Alex is sitting in a room with IBM and Milestone, discussing potential application of Tiger’s media storage solutions in the surveillance industry. By that time the cloud had become pretty popular, and the surveillance data had to be stored, and later processed in the cloud. There goes the problem: applications on your computer can not interact directly with files stored in the cloud. They just “don’t speak the same language”. Until that point, Tiger Tech was never focused on bridging local applications and cloud data.
This is where an entrepreneur notices an opportunity and puts his head down to work. With a booming cloud migration market, Alex realizes the problem is much bigger than a single project. Actually, it’s almost a $2-billion-dollar problem (Cloud Storage Gateway has a $1.96B market size in 2018), expected to be $3.5 billion in 2020.
With over 10 years of experience in building state-of-the-art storage systems, Alex and his team of engineers built Tiger Bridge, a brilliant middle-layer software enabling any application to work directly with files from the cloud (or tape).
By addressing a real customer problem, the company finds itself among the first movers in an exciting new market, which is growing by over 30% annually.
The perfect example on the importance of customer feedback, during and even before, building a new product.