How to Build a $B Startup

Source: Xconomy, Apr 2012

The quickest way to create a billion dollar company is to take basic human social needs and figure out how to mediate them online.

Is It a Problem or a Need?

I’ve now come to believe that the value proposition in a business model (value proposition is the fancy name for your product or service) fits into either one of two categories:

  • It solves a problem and gets a job done for a consumer or a company (accounting software, elevators, air-conditioning, electricity, tablet computers, electric toothbrushes, airplanes, email software, etc. )
  • Or it fulfills a fundamental human social need (friendship, dating, sex, entertainment, art, communication, blogs, confession, networking, gambling, religion, etc.)

Lessons Learned

  • Value propositions come in two forms: they solve a problem or they fulfill a human social need
  • Social Needs are friendship, dating, sex, entertainment, art, communication, blogs, confession, networking, gambling, religion, etc.
  • They have always been fulfilled face-to-face
  • They are now moving on-line
  • The market size for these applications equals the entire human race
  • These are the ultimate applications
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