A common startup failure is building a solution for a problem that doesn't have meaningful pre-existing demand. This happens when founders start with a product vision instead of observing market pull. They arrive with a fully-built 'submarine' but find no 'water,' looking foolish for not checking for demand first.
Related Insights
To determine if a startup will succeed, analyze the sequence of events. Did organic customer demand and behavior exist before the startup created its supply (product, messaging)? If the startup is trying to force motion with its supply, it's a sign of conjuring demand and a higher risk of failure.
Some business ideas, like a "what's on campus" app or a universal group organizing tool, seem obvious yet consistently fail. These are "mirage opportunities" where a fundamental assumption about user behavior is flawed. If many have tried and failed, it's a signal to stay away.
Successful startups tap into organic customer needs that already exist—a 'pull' from the market. In contrast, 'conjuring demand' involves a founder trying to convince a market of a new worldview without prior evidence. This is a much harder and less reliable path to building a business.
Founders mistakenly treat their product idea as fixed while searching for customers. The correct mindset is the reverse: customer needs are a fixed reality. Your product is the variable you must shape to fit that reality, not the other way around.
Large companies often identify an opportunity, create a solution based on an unproven assumption, and ship it without validating market demand. This leads to costly failures when the product doesn't solve a real user need, wasting millions of dollars and significant time.
When a startup finally uncovers true customer demand, their existing product, built on assumptions, is often the wrong shape. The most common pattern is for these startups to burn down their initial codebase and rebuild from scratch to perfectly fit the newly discovered demand.
Instead of searching for a market to serve, founders should solve a problem they personally experience. This "bottom-up" approach guarantees product-market fit for at least one person—the founder—providing a solid foundation to build upon and avoiding the common failure of abstract, top-down market analysis.
This reframes the fundamental goal of a startup away from a supply-side focus (building) to a demand-side focus (discovery). The market's unmet need is the force that pulls a company and its product into existence, not the other way around.
Using a child's toy analogy, demand is a pre-existing hole (e.g., a star shape) and your product is the block. Founders fail when they build a block and then search for a hole it fits. The real job is to first deeply understand the shape of the hole, then craft a block that fits it perfectly.