In the Silicon Valley of the past, young hackers created one groundbreaking software service after another, guided by the motto of Y Combinator:
Make Something People Want
However, as large corporations have increased their presence even in the software domain and the startup wave has settled down, we often hear voices saying "I can't see the next trend" and veteran entrepreneurs saying "I don't know what I would do if I were young now." There also seems to be a trend among entrepreneurs to choose to start small businesses rather than startups, or to take over existing businesses through search funds.
In light of this situation, I think startups need a new motto to replace "Make Something People Want". I feel this need is especially great in Japan.
So, as this new motto, I am proposing:
Make Something the Future World Needs
Let's consider why this motto is needed now, while looking back at the history of startups.
â» As an initial note, I think there will probably be few people who agree with this article, and there may be criticism. But I am writing this because I want to find like-minded companions who share the same thoughts now.
In the 2010s, "Making Something People Want" was the Right Answer
The startups I want to discuss in this article are companies that aim for rapid growth in a short period of time. To avoid misunderstanding, I want to explicitly call startups that aim for rapid growth in a short period of time "high-growth startups".
Paul Graham wrote an article saying "Startup = Growth", and in that article, he listed two conditions for rapid growth:
(a) make something lots of people want, and
(b) reach and serve all those people
I think the 2010s were an era where you only had to think about the motto "Make Something People Want".
First, the startup domain matched this motto well.
Let's consider the first condition. "Make something many people want" is easy to satisfy for something like a barber shop. Almost everyone wants a haircut. But that doesn't make it a high-growth startup. Because the second condition of "Serve all those people" is difficult to satisfy for a barber shop.
On the other hand, software is good at the second condition. Because it has the characteristic of being easy to copy and distribute.
So if you wanted to start a software business and create a high-growth startup, the key was whether you could "Make something many people want", the first condition. If you could accomplish this, you could grow rapidly as a high-growth startup.
For the past 20 years or so, the startup domain has basically been premised on software, so if you were conscious of making something many people want, you could launch a high-growth startup.
The market was expanding rapidly, and it was a period when initial investment and marketing costs were decreasing. At the same time, methodologies such as lean startup and design thinking were being formulated on how to "Make something people want". As a result, as an ecosystem as a whole, if the number of startups increased, high-growth startups would be born at a reasonably high probability.
However, times have changed, and after the boom of the 2010s, I think there are several limitations and issues emerging with this equation.
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Why "Make Something People Want" Alone is Not Enough
Issue 1: Prone to Becoming a Small Business
In the software market, opportunities in easily accessible areas are gradually decreasing.
In the past, for software startups, the problem you chose might have grown along with the market, but as this happens less frequently, if you choose a small problem at the beginning, you may end up staying with that small problem and over-optimizing for it.
Lean startup and design thinking teach methodologies for "making something people want", but they don't teach whether it will become a big business. Even if you can correctly practice the lean startup methodology, if you fail in choosing the problem, it will become a small business.
In fact, unlike a generation ago, there are fewer companies that achieve great success in the B2C domain, and fewer prominent young entrepreneurs.
On the other hand, veterans who are newly starting software businesses are beginning to launch multiple products almost simultaneously. They need to consciously choose problems, and starting up also requires strategy.
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Issue 2: The Correct Domains are Limited
As it was said that "Software is eating the world", the 2010s were truly an era in which software devoured every industry. I think software will continue to be important going forward, but it seems to be settling down a bit compared to the huge waves it used to create. On the other hand, innovation in non-software domains is in demand worldwide, and there are big opportunities lying dormant.
But in those domains, "Serve all those people", the second condition, is difficult, and you need to understand various costs and have the right strategy. There are more things to consider besides "Make something people want".
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Issue 3: Misunderstanding of "Startups"
In response to the recent attention on startups, it seems that the term "startup" is increasingly being used for forms of entrepreneurship that don't aim for rapid growth. Some people seem to have the perception that if technology is involved and you call it "something-tech", it's a startup.
There are various types of startups. For example, in a past article, I introduced four types:
- Survival - Business for making a living
- Lifestyle - Entrepreneurship for freedom or hobbies. Relatively small-scale, not much considering expansion
- Managed Growth - Aiming for steady growth
- Aggressive Growth - Aiming for rapid growth
All of these satisfy "Make something people want".
On the other hand, what Japanese society as a whole needs and expects are high-growth startups, the aggressive growth type of entrepreneurship that creates the next industries.
If so, it would be better to have a motto that encourages such rapid-growth startups.
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Issue 4: The Downside of Solely Pursuing "Make Something People Want"
When you are conscious of "making something people want", you inevitably become myopic. Contracted software development is also "making something people want", but unfortunately it is difficult to become a startup and create products that greatly change the world.
Furthermore, if we become too conscious of what people want, we may end up creating services that monetize through political division.
Originally, the premise of "Make something people want" should have been "Make a better future", but as this perspective has gradually been lost, I think there are downsides to overpromoting "Make something people want" when I feel that such viewpoints are being lost.
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Issue 5: Reflection on the Future and Ideals
I think many people would agree with Peter Thiel's words: "We wanted flying cars, instead we got 140 characters".
Startups in the past had the premise of having a grand ambition to "change the world", and tried to create businesses on top of that. In a sense, it was ignorant, arrogant, and naive, but this idealistic attitude itself was the driving force behind startups and innovation.
However, that attitude seems to be fading now.
Are we able to declare dreams like "Organize the world's information and make it universally accessible and useful", "Create a new currency", or "Connect the world"? Are we truly aiming to "create industries"? How many exciting initiatives have you heard of that, besides profitability, invite us to a world completely different from the one before?
Looking back, the metric for measuring the success of a startup should have been not only "how much money you made" but also "how much you changed the world".
But now, don't you feel the presence of so-called "suits", the kind of people that Silicon Valley folks used to avoid, is increasing? (Personally, I think it's fine if people wear suits as long as they have grand dreams)
I think effective accelerationism and techno-optimism are emerging from Silicon Valley and elsewhere as a counterpoint and out of a sense of crisis towards this situation.
I myself take a different stance from these positions, but I agree with much of the sense of crisis they have and the trust in technology and humanity that lies behind these philosophies.
That's why I think a motto that serves as a preamble to "Make something people want" is needed.
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To Change the Current Situation
However, over the past decade, as Japanese startup ecosystem has developed and matured, we have become optimized for "making something people want". We may have become overly optimized for it.
During this time, the frequency of hearing about what problems to tackle, what metrics to look at, the beauty of business models, money, and business growth has increased. And precisely because it has matured and become formulaic, it seems to be becoming increasingly difficult to take risks and create initiatives that will make the future society.
If the meaning inherent in startups is being gutted and the social function expected of startups is being diluted, then I think a countermovement is necessary. That is the background and problem recognition for why a new motto is needed.
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"Make Something the Future World Needs"
Based on this problem recognition, as a new motto, I came up with:
Make Something the Future World Needs
There are three keywords included in this phrase.
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(1) Solving Problems on a "World" Scale
High-growth startups aim for rapid growth. However, not temporary rapid growth, but medium- to long-term rapid growth. At that time, you need to be concerned about the maximum value of "how much you can grow". If you target a small market, even if you can grow rapidly for a while, you will quickly reach your limit.
The maximum value of a business differs depending on how big of a problem you are trying to solve. If you want to create a business that continues to grow rapidly as a startup, you need to try to solve a global-scale problem. Even if it's domestic, you need to solve a large problem that at least involves all of Japan.
To indicate that sense of scale you are aiming for, I think the word "world" is important.
(By the way, I think some people use the word "world" to refer to their immediate surroundings, but the world here refers to the wider world.)
Furthermore, this phrase implicitly indicates the grand ambition of "changing the world". I think the importance of having a grand vision can also be evoked from this phrase, and the strategy will be one that aims for the world from the very beginning.
"Make something the world needs" is one of the conditions required for many high-growth startups.
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(2) Targeting the "Future"
I think the word "future" is also important. There are also two reasons for this.
If it's already a big problem and can be solved now, it's a field that established companies are good at. So startups target either:
- Problems that will become big in the future
- Problems that can be solved in the future
For the former, you need to grasp the beginning of big changes in the market or culture. For the latter, you need to make an effort to grasp major changes in technology.
In either case, startups aim for rapid growth by taking temporal risks. This increases uncertainty, but that's precisely why established companies hesitate to enter.
As Paul Buchheit said, "Live in the future and build what's missing", if you want to aim for a high-growth startup, you target the future.
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(3) Make Something "Needed" by the world
While assuming "Make something people want", I am proposing the word "something needed" as a new motto to question the will for the future.
The need to "Make something people want" probably won't change much going forward. Because a business can't be established without it. That aspect is always necessary.
On the other hand, I thought that emphasizing the noble cause of "creating what the world needs" would be more important in fostering future startups.
Additionally, using both "future" and "what we want" could make the concept too vague, so I chose the phrase "what we need" to encourage more compelling and urgent ideas.
By asking ourselves, "Would it be strange if this product didn't exist in the world 10 years from now?" we can determine to a certain extent whether it is "something the future world needs." And even if it is difficult to realize, we should have the determination to create what the future needs, starting from today.
Through this thought process, I hope that we can regain our imagination and determination for the future.
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I think by actively trying to answer this question of "Are we making something the world needs?", the role that startups originally had can be re-emphasized, and it can be well differentiated from other startup styles.
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The Sprouts of Businesses Needed in the Future
There are many things that the future world desperately needs.
It may be measures against climate change. Climate tech is one domain of that. Creating businesses that serve as countermeasures to climate change is something the world needs, and if successful, you can gain great wealth.
It may be space. Startups like SpaceX have already emerged. If we can acquire resources in space and do various businesses via space, the world will be able to do much more. It may be a distant future, but humanity may need to pioneer space in order to survive.
It may be infrastructure. Many of today's cities took their current form about a century ago. It's time to rebuild aging infrastructure that is nearing the end of its lifespan.
It may be security. Amidst various wars occurring, companies must be wary not only of defense to protect their own country, but also of cybersecurity. Furthermore, from the fact that what is needed to ensure our safety in various fields such as economic security, food security, climate security, and space security is starting to be discussed, strengthening security is in demand.
It may be water and food. Japan's population will decrease, but globally, the population will continue to increase for some time. But if affected by climate change, there may not be enough water (in fact, it's already happening). If there is not enough water, there will not be enough food, and wars could occur. That must be prevented.
It may be healthcare. A world where many people can live long and healthy lives is what everyone is waiting for. Improving access to healthcare, establishing new treatments and new drugs is necessary for the world. Or by supporting the development of artificial wombs and such, it may be possible to provide new careers.
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There are still many areas that need to be worked on besides the ones listed here, and although few in number, I feel that several startups are emerging. We need to increase such efforts.
And I think increasing challengers in these fields is also good for the Japanese economy.
Because through these businesses that "Make something the future world needs", industrial restructuring can also be done, and it will also create prestigious, high value-added jobs. Furthermore, if thinking opens up toward the future and people can have hope for the future, I think it will generate the dynamism to break through the sense of stagnation in the Japanese economy. In a sense, generating such dynamism is the idealistic aspect that startups possess, and I think that is what is expected of startups.
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Call to Action
As Paul Graham says, "Most people should not try to start startups". Still, the rare people who try to aim for high-growth startups are a treasure for society as a whole.
I hope that such people will increase, and at the same time, I hope that people who originally had such thoughts will not be swept away by advice from those around them like "At first, just aim for a hit" or "Think calmly and realistically, it's impossible to change the world, so first let's increase your own assets" and flow into other forms of entrepreneurship.
(To avoid misunderstanding, let me emphasize again that I think people who originally aimed for lifestyle entrepreneurship or managed growth entrepreneurship should do so, and that is also a wonderful choice. This is strictly in the sense of avoiding diminishing the grand vision of people who originally had ideals and grand ambitions.)
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Ideally, we should create successful cases, and have those successful people become role models, but unfortunately, while such real examples have not yet emerged domestically, what we can do now seems to be to put our thoughts into words like this and change the flow even a little.
At the very least, by doing so, I hope it will lead to encouraging people who are thinking about the future world.
And if there are people who want to "Make something the future world needs", there are a few things I want to do.
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â Let's ask "Are we making something the future world needs?"
I think we can use this question to determine to some extent whether our idea is a high-growth startup or not.
If you hesitate to answer Yes, try to keep thinking about the idea until it becomes a Yes. Or one way is to ask someone who has an answer to that for their ideas.
Also, if the support side advocates high-growth startup support, I feel there is a need to clearly indicate a stance of supporting companies that are trying to "Make something the future world needs".
â¡ People with the same thoughts should gather and advocate
People who don't just want to "do business" but "want to make something the world needs" and "want to have strong ideals", please gather. I think many people who gather are not good at it, but we can't change society if we don't make this voice bigger, and since there are more people in the world who gather in a small and steady way, if we stay in a natural state, many people will be stained by such a culture.
So I would be happy if people who really think they will change the world and create industries agree with the words "Make something the future world needs" or ask those around them. If agreement and questioning spread, the direction of interest around us should change little by little.
And if there are more places for people who are really trying to make something the world needs to gather and share that passion, it should be easier to sustain your own passion.
⢠Let's talk about the future
To think about what the future needs, you have to think about the future. I think there are still few such places in Japan, and many people say they don't usually think about the future, so please let me talk about the future together.
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Summary
There are problems like poverty and inequality that are difficult to solve in the market, so I don't think the form of entrepreneurship called high-growth startups is a panacea, and I think small businesses and other startups also have sufficient value.
But still, I believe there are many problems that can be solved by advancing science and technology and explosively spreading them, and there are also many big problems waiting for early solutions.
To accomplish that, human will is necessary. The clear will to make something the future world needs and "save the world".
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I don't think there will be many people who agree with this, and I don't think everyone needs to agree. But if there are people who agree with these ideas even a little, I think it would be good if the movement to make something the future world needs can be made visible.
In this way, I hope to generate the next generation of startups together with the rare people who have the will to make what the future world needs.
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Make something the future world needs.
