Should you double down on domain expertise or be an industry outsider. Innovation in both has one common theme: real people & real problems.
I wrote this article in 10 minutes.
Let’s begin with my favorite definition of innovation:
An innovation is a feasible relevant offering such as a product, service, process or experience with a viable business model that is perceived as new and is adopted by customers. — Gijs Van Wulfen
Simple right? Let’s dig a little deeper…
Either you are zoomed in or zoomed out.
The latter is and always has been a 1 in a million scenario.
But if it works, it’s a home run 🚀
Why? Industries are complex giants. Therefore, solutions to their problems are only an extrapolation of this reality… Coming in as an outsider is always the greatest challenge. This is because solutions to problems need to be relevant, people need to experience real problems, and more importantly: people need to be ready for what you want to offer.
As a domain expert, being close to the problem means understanding the industry and the people within it better than anyone else. You are literally one of them. In this innovation scenario, you need to be part of the critical mass you want to revolutionize. Otherwise, you might hit once or twice in the short run, but you will definitely keep on missing in the long run.
I personally believe solving a real problem as an industry outsider is almost impossible. Why? Ignorance. How can you possibly think to deliver anything remotely relevant if you do not even know how and why your potential customers do things. It’s pure hubris to think you do. And if by a stroke of luck you manage to land a solution that does solve a problem, I salute you! But try developing a formula for successful ventures based on that. And come again.
There is a reason why 9 out of 10 startups fail. There is a reason why a recent HBR study found that out of a sample size of 30,000 products, 95% of them failed within the first year.
So. What makes you think you can achieve anything as an industry outsider? And why even waste energy and time running against unbreakable walls, if what you should be doing is what you do best. And that is what you have spent years observing and learning. It’s what you know best. It’s your expertise!
Now. Can you bring innovation to an old institution as an outsider? Easily and probably in just days. But that’s just perspective. And great ideas will take weeks to find relevance within the companies ranks and even more months to implement. Believe me. I have done design sprints for companies like H&M before. You won’t even recognize your initial idea once it’s found its place.
In light of this fact, you will equally need months of hard research or years of experience to understand the space you intend to enter.
So why focus on trying to be unique as an industry outsider, when domain expertise is the superpower you simply need to tap into.
Especially when domain expertise = deep problem knowledge.
And you definitely have it.
If businesses exist to solve problems, then thinking problem-centric is the only way to get there. But just approaching and thinking of it isn’t good enough. Living a problem-centric life is a mindset.
“A problem well-defined is a problem half-solved” — Charles Kettering
Kettering was an American inventor, engineer, businessman, and holder of 186 patents. Throughout his life, Kettering founded Delco and also headed the General Motors Research Department. A truly incredible man, who knew what it meant to live a problem-centric mindset.
So, what did he exactly mean with the above quote? Allow me to decipher it:
You might think you know what the problem is by thinking about it. But that doesn’t mean it’s there. And it certainly doesn’t mean it’s relevant.
In my opinion, this is the biggest fallacy in Entrepreneurship to date. It is the overvaluing of ideas and the undervaluing of problems. Now, don’t get me wrong. Everything starts with an idea. My life included. I have around 2–3 new business ideas every day. But they are all completely useless unless tied directly to a customer segment with a validated problem worth solving.
So validated customers make a problem well defined and half-solved.
But how can I validate my idea and the relevant customers?
One approach is The Lean Startup by Eric Ries. In his Idea — Build — Measure — Learn cycle he outlines perfectly the need to not only test your ideas in a framework, but he also starts one step before that.
That step is what he calls Customer Discovery. To speak with your potential customers and try to understand the true problems they are experiencing. It’s not to build something and tell someone what kind of problem you think they have — rather, it’s to serve them where they are.
I’ve learned the importance of Customer Discovery and interviews the hard way. They never come easy. So I developed a plan and process from building products, which led me to create HUSTLE OS: an operating system to guide you through this difficult process with a clear focus to discover and define a real problem for your chosen customer segment and early adopters. The OS is Notion-based with over 200+ hours of work for just $49 (soon $75) with:
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A problem-centric mindset is to think and see things that no one else can — whether you’re a domain expert or industry outsider. But true innovation is not just a mindset. It culminates from combining your problem knowledge with a unique skill set. And this can only come from training a problem-centric mindset, daily. I do this in the following two ways:
It’s all about asking the right questions. To yourself and others. And you will uncover details you could have never dreamed of.
To me, the first way of solving a problem is truly the only way we should build businesses early on. Unless:
If you are none of the above, please do not make the mistake I did. The mistake of building a solution (AgeOfUs) for an industry I had no experience and no problem knowledge in. It does not work. And I tried everything.
I would strongly urge you to build solutions where you have high problem knowledge. Even if you think you have no expertise, you will develop your domain expertise faster than you would succeed as an industry outsider.
Do what you know best. — Julian Paul
Living problem-centric is seeing things that are so core to the way people live, creating a solution for them will change their lives forever.
Don’t you want that?
Don’t we all want to change other people's lives for the better?
The reason why so many of us miss the core problems is because we live for the solution. We dream about it, we build it, but it finds no one interested.
But problems are here to be solved. And they are ultimately abundant. Some bigger, some smaller, but all relevant to a closely defined group of people...
Who are your early adopters? What is their next big thing?
Practice a problem-centric mindset for yourself.
Then live it for them.