Sweet Spot, Ideas, Prototypes

When I talk with people starting their entrepreneurial journey, I often hear familiar concerns. "I have an idea, but does it have market potential?" or "This is what I'm good at, but can I build a business around it?"

To those wrestling with these questions, I always suggest drawing three circles: Expertise, Passion, and Opportunity.

Many entrepreneurs try to start with only one or two of these elements. They either focus solely on what they're really good at, or simply jump into market opportunities without proper preparation. But the true Sweet Spot lies at the intersection where all three meet.

Let me give you an example. I met an entrepreneur who was exceptionally skilled at programming (expertise). He was also passionate about coding (passion). But he failed because he couldn't create products the market wanted. He failed to properly identify the opportunity.

Conversely, many cases involve accurately spotting market opportunities but lacking the expertise to realize them. This shows that passion alone isn't enough.

What's interesting is that many entrepreneurs become overly obsessed with 'ideas.' They claim to have billion-dollar ideas, yet often don't know how to actually implement them.

The truth is, ideas are the easiest part of the entrepreneurial process. Anyone can come up with the idea of selling a smartphone with week-long battery life for $99. But actually creating it is an entirely different dimension of challenge.

This is where the importance of prototypes emerges. A prototype is the first step in turning your idea into reality. It's no longer just imagination in your head or plans in PowerPoint, but something tangible you can actually touch and interact with.

Look at Canva's case. How did they test their idea of "a service where anyone can design easily"? They didn't try to create a perfect product from the start. Instead, they built a web service with only the most basic features and observed user reactions.

What's crucial in this process is actual data. Not answers to "Would you use this service if it existed?" but whether people actually use the service. Plans and actual behavior are always different.

My advice to those preparing to start businesses is this: First, find your Sweet Spot. Discover the point where expertise, passion, and market opportunity meet. Then, don't obsess over ideas—build a prototype as quickly as possible.

Ultimately, the starting point of successful startups lies in properly combining these three principles. Finding your Sweet Spot, selecting viable ideas, and quickly building prototypes to test them. This is the core that we must remember in early-stage startups.

There's content I deeply resonate with. Marc Andreessen's 2011 essay remarkably and accurately predicted the reality we face today. Based on what I've observed and experienced, let me summarize the key insights from this piece.

1. Software's Penetration

Every industry is eventually becoming a software company. Tesla is no exception. Many people think of Tesla as an automotive company, but Tesla is actually a software company. The core competitive advantage of Tesla vehicles lies in their autonomous driving software and electric vehicle control systems.

2. Disruption of Traditional Industries

Just as Borders was overtaken by Amazon, software is reshaping existing industries. Netflix brought down Blockbuster, and iTunes transformed the music industry. This is just the beginning. Over the next decade, many more industries will be revolutionized by software.

3. Democratization of Infrastructure

In the past, starting a business required enormous upfront costs. However, with the advancement of cloud computing, anyone can now start a global service at a low cost. What cost $150,000 in 2000 now requires only $1,500.

4. Expansion of Global Markets

Broadband internet users have increased from 500,000 to 2 billion. In the future, 5 billion people will access the internet through smartphones. This provides unprecedented market opportunities for software companies.

5. The Importance of Education

The biggest challenge in this transformation is education. While Silicon Valley companies struggle to find talent, many people remain unemployed. This is evidence that the education system is failing to keep up with the demands of the new era.

6. America's Competitive Advantage

It's not a coincidence that innovative companies like Google, Amazon, and eBay emerged from the United States. Excellent research universities, a risk-taking culture, abundant venture capital, and a stable legal system made this possible.

7. New Challenges

New companies must survive economic headwinds. Many workers lack the necessary education and skills. Startups must prove their value.

These changes are an inevitable trend. The next decade will see fierce competition between established companies and software-based startups. This will be a perfect example of what Schumpeter called "creative destruction."

But this is ultimately a positive change. New opportunities will open up, more efficient solutions will emerge, and consumers will experience better services. This is just the beginning.

To succeed in this transformation, companies must acknowledge that the software revolution is coming and prepare for it. Even giant software companies like Oracle and Microsoft are facing threats from new challengers. Companies that don't change won't survive.

Entrepreneurship Begins with Simple Questions.

There's a question I frequently encounter in today's startup ecosystem: "Is our product/service innovative enough?" or "Do we have a vision that can change the market?" Whenever I hear these questions, I actually advise people to go back to simpler questions instead.

Looking at Silicon Valley success stories, we often fall into a misconception. We assume they started with grand visions from the beginning. But reality tells a different story.

Apple's beginning was the very simple product called "Apple I." This first creation by Steve Jobs and Wozniak didn't carry the innovative vision we see in today's iPhones or MacBooks. It simply started with the basic question: "Can't we make a better computer?"

The successful entrepreneurs I've observed in the startup world were similar. Most of them started with questions like these:

"Can't we make this easier?"
"Why does this have to be so expensive?"
"Isn't there a way to solve this inconvenience?"

Canva's case is particularly impressive. They started with the simple question: "Why do design tools have to be so complicated?" In an era when it was considered normal to spend months learning professional tools like Photoshop, they asked: "Can't anyone design easily?"

There's something I always emphasize to those preparing to start businesses: focus on the problems right in front of you rather than grand visions. Sometimes the simple question "Can we make this better?" creates companies worth billions of dollars.

There's a phrase often heard in the startup ecosystem: "Identify the essence of the problem." But I'd like to add to this: "And ask the simplest question about that problem."

Most successful products start with such simple questions. And in the process of finding answers to those questions, markets naturally form, visions take shape, and innovation happens.

Ultimately, the essence of entrepreneurship doesn't lie in setting complex visions, but begins with simple questions. The journey of finding answers to those questions is precisely the entrepreneurial journey itself.

Today, many entrepreneurs are probably pondering grand visions. But I hope they'll pause and ask themselves: "What simple question did we start with?" And perhaps it would be good to return to that question.