Problem vs Opportunity First Approach

When I'm evaluating an investment for Long Journey Ventures, one of my favorite questions to ask is: "Out of all the things you could spend your time on, why this company?"

I've found that the answer to this question typically falls into two camps:

1. Problem Focused

   The answer takes the shape of "I started experiencing X problem in some way, so I started to look for solutions and had the insight of Y." In this answer, there is some organic connection with the problem being solved.

   One of the best examples of this I think is TJ Parker, the Founder/CEO of PillPack, one of the first D2C online pharmacies, which was bought by Amazon for $1 Billion. I wasn't lucky enough to invest, but I do remember meeting TJ early on and hearing his story about how both he and his dad were a pharmacist and that through working for his dad he had been intimately close with the problem of prescriptions.

2. Opportunity Focused

   The second type of answer takes the shape of "I looked at the market and it's a huge business opportunity."

While I think you can build a successful company in either direction, my hypothesis is that those who are problem focused lead to a lot more massive businesses for a few reasons:

1. 🎢 The Rollercoaster - Being a founder is a rollercoaster. When you are in a down moment, source of energy and motivation is stronger when it stems from the problem vs the opportunity.

2. 🏅 Rewarding vs Fun - I recently tweeted about this. I often get asked "Are you having fun building Reforge?" Honestly, no. It's not "fun." Vacation with my college buddies if fun. I do it because I find it challenging and fulfilling.

3. 🟩 Green Grass - The number of tech companies is growing at a faster rate than the supply of talent. There are more and more opportunities for talented people. Which means, the grass often feels greener as a founder. There is always another idea, role, company, market, etc. that feels easier, more compelling, or more lucrative.

4. 💡 Miracles + Insights - One of the Long Journey Partners, Cyan Banister (Investor in SpaceX, Uber, Niantic, and more) , talks about to build a massive business you typically need one or more miracles to occur. Miracles are problems that don't have a solution but if unlocked creates massive more value. Some times miracles occur by luck like catching a pandemic tailwind or some new emerging acquisition channel.

I myself have fallen into both of these camps through out my career. My first two venture-backed companies were opportunity focused. For example, my first company Viximo was in the social gaming space. I started that company because I learned about the virtual goods monetization model emerging in Asia and seeing the Facebook platform launch. It seemed like a great opportunity, but I wasn't into gaming or connected with the problems in any way and as a result the rollercoaster was tough to stomach.

Reforge on the other hand started with a problem. In 2015, I was working at HubSpot as the VP of Growth. Every week, a member of my team would ask me about professional development. What can I do to up-level faster? How can I get better at identifying problems in our growth strategy? Where can I look for tools to better my thinking around monetization? After hours of research and conversations with friends and colleagues, I found myself hitting dead ends. It made me feel like a terrible manager, but also tapped into a problem I had experienced many times myself. Reforge is already a much bigger business vs my initial companies.