In a recent article, I explored some of the flaws in the outwardly healthy-looking startup ecosystem. With investment booming, it looks like things are in rude health, but failure rates remain incredibly high, and returns on R&D investment continue to diminish. This results in a growing amount of market power being concentrated in a small number of incumbents.
The deluge of easy money into the sector has prompted many would-be entrepreneurs to take their eye off the ball, and whereas Peter Drucker famously said that the only real purpose of a business is to create a customer, the current entrepreneurial landscape allows founders to get rich without worrying too much about that.
“In entrepreneurial circles, it’s really easy to get sucked into focusing almost exclusively on what you do and the technology you’re developing, and lose sight of what it is you’re actually trying to solve for the customer entirely,” explains Gadi Ponte, cofounder and CEO at ThinOptics. “When we first started our business, we knew all reading glasses solve the problem of turning blurry vision into clear vision, so instead of just pushing another conventional product onto the market, what we’ve done is to employ critical listening to anticipate the problems that are inherent to the form of conventional reading glasses.”