I met two new software entrepreneurs last week who set out to modernize the industry they succeeded in for the last 20 years.
Their industry is a notorious technology late adopter.
Almost none of the people who deeply understand their day-to-day problems go on the quest to solve them in a lasting way.
And outsiders with big funding have been notoriously unsuccessful at changing the industry, despite huge investments.
Powerful software point solutions don’t seem to be moving the needle. Something deeper is going on.
I was encouraged that these entrepreneurs are making progress by thinking differently about how they can actually solve the larger problem.
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They know that their software is an important but small part of a lasting solution.
Business model changes, habit changes, and compensation changes have to be part of it too.
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They are starting small with their holistic approach and proving that it works as a complete integrated system.
They have created a new business in the industry that is rewired based on the technology and business model changes that go together. They are their own first customer for their software, and it’s working.
- They know that big funding isn’t the whole answer.
“Get Big Fast” VC funding will not help them iterate and improve and slowly demonstrate success that others can replicate.
It’s a huge market, but it won’t be solved in the 5-7 years of 10x investment payback that big funding requires.
They are funding this software business from their personal time and capital investment, their reimagined business in the industry, and from patient individual investors who don’t need a quick return to keep their jobs.
I told them that their deep industry knowledge with a patient funding approach is likely the magic trick to crack the code in this industry.
- Big-funded software companies haven’t solved it so far.
- Big industry players have no incentive to change their ways.
- Their industry front-line peers won’t bet everything to solve the big problem completely.
These entrepreneurs are patient, savvy, and think very big. That combination has real advantages over the big guys.
They are great entrepreneurs too.
They are onto something that can be a huge business someday.
#practicalfounders
