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Hello, in this session

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we will go over a really, really important topic

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during the entrepreneurial journey

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which is consumer discovery and validation

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Please pay attention to the class

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Are you ready? let's begin

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Suppose that you start your businesses,

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then probably your business idea

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can be based on the consumer's problem

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You notice that consumers right now face unmet needs,

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and then this consumer's problem

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has not been solved properly yet

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So that's why you prepare for your solution,

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and your solution is your idea and also is your businesses

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This is called as a problem-solution perspective

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But the more important issue 
inside the problem-solution perspective is that

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many times, the reality is different from your hypothesis

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So probably,

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you cannot have many consumers 
than you thought

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Why?

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There are basically two reasons, in my opinion

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The first reason would be your assumption 
about consumers' needs

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and consumers' problem was not true

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Your assumption is wrong because 
no one wants to have a solution.

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Why?

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Because they don't feel there's problems

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No one wants to purchase a solution 
if they don't have a problem

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But you prepare the solution 
for those kind of problems

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No one wants to fix it

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And second reason why you don't have 
consumers is that your assumption is right

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So you pick up, correct your problems

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But the real issue is that your timing is not right

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So you are in the wrong time

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So that's why you don't have consumers

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The startups, your startups are ready

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But consumers are not ready

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It has happened many times

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Look at this chart

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CB Insight, provides us several kind of statistics

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And then, according to the CB Insight statistics,

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there are top 20 reasons why startup fails

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Number one reason is what?

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Number one reason is no market needs

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Same thing happened

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Consumers don't feel any problem

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For your solutions

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So that's why you cannot attract any consumers

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I will give you an example

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Look at him

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He tried to solve the problem

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about the consumers for presentation

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So he thought that, there are so many people suffer from

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lack of the skill about the presentation,

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but they want to present very well

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But there is no way to improve their presentation skills

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I think it could be a great problem

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nobody properly solved this kind of problem yet

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So that's why I prepared for the solution

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This is my solution

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There is a boy, he is who hoped to 
make a presentation very well

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And then he prepared for the solution, 
which is the ratemyspeech

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The basic idea of the ratemyspeech is that

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you record your presentation

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and you upload your video to some of the community,

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online community, which is a ratemy, website

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Then other people who register for the ratemy.com

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watches your presentation

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then they rate the performance of your presentation

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So basically, he started these types of 
businesses that record on presentation

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and get the feedback from us, from others

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Then what happened? 
Think about it

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Can you take a video from your presentation

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and upload your video to somewhere else,

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to receive the feedback from, anybody, from random guy?

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Probably not

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Why? 
Because, I don't want it

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actually, I know my presentation skill is weak,

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but in order to improve my presentation skill,

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should I upload my video of the presentation?

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how to take a video about my presentation?

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Wow, it is not convenient

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I'm not feeling comfortable

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So this is the reason, the consumers 
avoid these types of solutions

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So there's no one who wants to
use these types of solutions

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And there's not enough incentive to do it

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You know what I mean?

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Let's look at another example

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look at him

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He thought that,

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so many people use the valuable item just only once

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For example, snow blower

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I purchased the snow blower for upcoming winter,

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but I used this snow blower only once in this winter

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And I just put this expensive snow blower into my garage

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I never used it again

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Wow, it's so waste

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it is so wasting

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So that's why he thought that, why not?

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Why not

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allowing others to use my unused item,

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unused devices, in exchange for the money?

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Then I can make additional money

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So he created some kind of solution, 
which is why own it?

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Why own it?

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You just borrow the devices from somewhere else,

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or you can just lend your devices to somebody else

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and then you can make money

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And then we will use our resources efficiently

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That is his idea, based on 
consumer's problem and solution

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so he made a mobile application

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So the consumers can open up the mobile application,

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and they can just simply borrow or rent the devices,

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like a snowblower or a lawnmower, something like that

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But what happened, consumers, people,

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simply don't want to rent their devices,

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or don't want to borrow the devices from somewhere else

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And think about it

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It was also very dangerous

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so how to rent your devices to somebody else?

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Then probably somebody else should visit your places

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Think about strangers visiting your places

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Wow, it could be very dangerous

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They can be deaf, they can kill,
they can be terrorist

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nobody knows who they are

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so it is not safe

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safe way is not just simply not to rent anything

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So that's why he cannot attract any consumers

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So this business failed

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Look at another one

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his idea was very interesting

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Because he thought that,

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there are so many conferences out there

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And then after conference, what happened?

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Nothing, nothing happened

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so we cannot make any friends out of conference

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Wow, it is so waste. And then

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He thought that, why we cannot 
make friends out of conference?

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Because there is no community,

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no online community for the conference participants,

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gather together again after the conference

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So that's why he talked about 
his idea with conference organizers

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And then conference organizers

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many conference organizers agree with his idea

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And then conference organizers said that,

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yes, it could be really great 
if you make those kind of community

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So that's why he put a lot of effort and energy

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to create some kind of after-conference community

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for example, like a Facebook,

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specialized Facebook for the after-conference

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This is kind of concept

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So his idea was Eventvue. Eventvue

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He started with these businesses 
that is supplying social community

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like a Facebook for the conference, participant

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What happened?

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Conference organizers were not interested

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in these types of businesses

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Although they said that, yes, it might be great,

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but that is their opinion

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But when they try to pay the service,

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then they don't feel any incentive to pay this,

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pay the service for these types of solution

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So conference organizers were not interested

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in actually paying the fee 
to those kind of communities

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So that's why he failed

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Let's look at this picture

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I asked Chet GPT to draw the webtoon-style pictures

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Well, this is a real startup example

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This is Zume Pizza

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Zume Pizza was a very successful one

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The concept of Zume Pizza is like this

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You just open up your mobile application,

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then you place the order, then later what happens

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there is some restaurant, a hidden restaurant over there,

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and then inside the restaurant, 
there is a conveyor belt and robot arms,

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so the robot basically made the baked pizza

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You know what I mean?

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Robot baked pizza

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So there is a complicated technology in it,

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advanced technology, AI, and robot, and others

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Then later people pick up the pizza

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and deliver the pizza to the door

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Then later, they the founding team 
had an additional plan

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which is baking on the way

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Baking on the way means 
they prepare for the big truck,

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and inside the truck, there is 56, mobile oven,

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Basically, you drove the street, down the street,

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and then you arrive at the destination

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once you arrive at the destination,

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you just finish baking the pizzas

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Then you can deliver 
the very freshly made pizzas right now

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to the consumers

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So great

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And how to estimate the timing and estimate the location,

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it's all based on the complicated the technology,

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data analysis technology in it AI technology in it

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So they calculate already,

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and then they optimize the location and distance

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and timing, something like that

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So their purpose is to deliver very fresh pizza on time

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This is the idea

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What do you think?

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So why they started these businesses?

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Let's look at this

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The founders started these businesses

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based on their assumption about consumers' problem

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They thought that there is a huge problem

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in terms of the pizza delivery

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What are they?

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First one, pizza delivery is sometimes slow,

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and also the pizza is kind of low-quality pizza delivery

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So people probably want better,

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fresher pizza delivery faster

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Then second reason, second problem would be

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there is an inconsistent pizza quality

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from traditional pizza delivery

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because there is a traffic jam, then it takes a long time

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So the restaurant-made pizza often arrives soggy or cold

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because of the delivery issues

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So that's why we should revolutionize the pizza deliveries

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So they started these businesses

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What about the reality?

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What about reality?

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It sounds great?

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Yes, great

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What about a little bit expensive, though?

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Are you willing to premium prices on this

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baking on the way types of pizza or robot-made pizza?

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To eat the robot-made pizza,

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you want to pay kind of 30% more?

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Are you ready to do it?

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In the reality, slow, low-quality pizza deliveries,

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most consumers

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were satisfied with the existing pizza delivery

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I'm okay for the Domino's

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I'm okay for the Papa John's

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because they are tasty and cheap, efficient

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Why not?

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Why should we pay more money on the robot-made pizzas?

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I don't care

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Second reason, inconsistent

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food quality from the traditional deliveries

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Well, most consumers were not demanding

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oven-baked on-the-way pizzas

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Sometimes I feel there's an inconsistent pizza quality,

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but I think it's okay

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Just my simple, simple lunch is fine

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In order to eat fresh pizzas,

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I don't want to pay the premium prices for the robot,

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Robot arms-made or oven-baked on-the-way pizza

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I don't want it, I don't care

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That's why what happened,

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Zume Pizza has raised around $445 million

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as outside funding

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led by SoftBank Vision Fund

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It was successful, so that's why the Zume Pizza

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was valued at over $1 billion once,

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but it shut down its pizza service in 2020

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So, what is the best takeaway from this story?

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So, the story is clear

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Assumption, your assumption is sometimes

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different from your reality

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Second reason why you don't have consumers,

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second reason is that your assumption is right,

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but your timing is wrong

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What if your problem is too early or too late?

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Then you cannot attract proper consumers

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So remember, success or failure

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is about timing issues

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So timing issue account for 42%

270
00:15:11.400 --> 00:15:13.339
of the start of failure

271
00:15:14.239 --> 00:15:17.690
Look at him. He is an NYU student

272
00:15:18.590 --> 00:15:20.059
who wished to know

273
00:15:20.359 --> 00:15:23.850
where his friends have a party

274
00:15:24.200 --> 00:15:28.259
Actually, he want to be invited to his friend's party

275
00:15:28.729 --> 00:15:30.279
Probably, he's isolated

276
00:15:30.529 --> 00:15:35.169
Anyway, he want to know where they are

277
00:15:37.019 --> 00:15:39.199
That's why he created one of the service,

278
00:15:39.199 --> 00:15:40.840
which is a Dodgeball

279
00:15:40.840 --> 00:15:43.840
Dodgeball is kind of a location-based

280
00:15:43.840 --> 00:15:45.669
social networking services,

281
00:15:46.219 --> 00:15:49.289
and it can be provided by the mobile phone

282
00:15:49.839 --> 00:15:51.689
The simple idea is like this

283
00:15:51.939 --> 00:15:54.739
You just text the message to your friends,

284
00:15:55.039 --> 00:15:56.990
and your friends receive the message

285
00:15:56.990 --> 00:16:00.040
about the information and where they are, about the party

286
00:16:00.520 --> 00:16:05.440
And then, if you are willing to attend this party,

287
00:16:05.440 --> 00:16:07.899
then you press one, Yes

288
00:16:08.149 --> 00:16:11.399
If you don't want to go there, and you press two, no

289
00:16:11.399 --> 00:16:12.640
It's pretty simple

290
00:16:12.690 --> 00:16:16.090
Then your friends know your willingness to

291
00:16:16.090 --> 00:16:18.100
participate in this party or not

292
00:16:18.100 --> 00:16:21.859
And you, you knew where they are

293
00:16:22.820 --> 00:16:23.659
But what happened?

294
00:16:23.659 --> 00:16:25.400
Think about it, what happened?

295
00:16:25.880 --> 00:16:29.529
He started this business, I think, a little bit early

296
00:16:29.979 --> 00:16:31.219
How early?

297
00:16:31.219 --> 00:16:33.499
it was not very successful

298
00:16:33.499 --> 00:16:36.819
because there is no smartphone and Facebook

299
00:16:36.869 --> 00:16:39.820
So, that's why not too many people can use these services

300
00:16:40.679 --> 00:16:44.100
At that time, the mobile phone was not smart,

301
00:16:44.100 --> 00:16:46.359
and you just received the text message

302
00:16:46.359 --> 00:16:48.780
Like this, you got the text message,

303
00:16:48.780 --> 00:16:52.400
like your friends, I don't know,

304
00:16:52.419 --> 00:16:56.000
your friends who is at Ace Bar,

305
00:16:56.000 --> 00:16:59.159
this is a location, Ace Bar in Manhattan

306
00:16:59.909 --> 00:17:01.929
Will you attend this party or not?

307
00:17:01.979 --> 00:17:03.019
Press one or two

308
00:17:03.619 --> 00:17:04.519
What do you think?

309
00:17:07.819 --> 00:17:09.769
You can simply just call them

310
00:17:11.640 --> 00:17:15.870
Hey, hey, Mr. Bae, we are at the, Ace Bar

311
00:17:16.520 --> 00:17:18.550
Will you attend this party or not?

312
00:17:18.550 --> 00:17:20.370
You just simply call them,

313
00:17:20.520 --> 00:17:24.810
and you don't have to make a complicated text message to them

314
00:17:25.959 --> 00:17:27.000
Where are we?

315
00:17:27.000 --> 00:17:30.500
We are Ace Bar Wall Street, nearby Wall Street,

316
00:17:30.500 --> 00:17:31.610
there is some blah, blah

317
00:17:31.610 --> 00:17:33.009
You can just explain it

318
00:17:34.119 --> 00:17:37.879
So, that's why not too many people use this problem,

319
00:17:37.879 --> 00:17:41.710
not too many people feel the same way of the problem

320
00:17:42.160 --> 00:17:43.439
So, that's why this company,

321
00:17:43.439 --> 00:17:46.080
although it was a little bit successful

322
00:17:46.080 --> 00:17:50.089
because Google acquired this company in 2005,

323
00:17:50.089 --> 00:17:53.010
but later on, Google shut down this service

324
00:17:54.479 --> 00:17:55.839
Then what happened?

325
00:17:55.839 --> 00:17:58.400
Anyway, he addressed

326
00:17:58.400 --> 00:18:00.760
I think it's a great solution, great,

327
00:18:00.760 --> 00:18:02.719
I mean, great problems

328
00:18:02.719 --> 00:18:06.319
He addressed the good problem, though

329
00:18:06.719 --> 00:18:09.370
Although his service was a little bit early,

330
00:18:09.920 --> 00:18:11.239
then later on, what happened?

331
00:18:11.239 --> 00:18:13.519
He started similar services again

332
00:18:14.119 --> 00:18:17.410
So, location-based, some kind of software services

333
00:18:17.760 --> 00:18:20.180
He started, full-scale

334
00:18:20.680 --> 00:18:23.119
I think the concepts are pretty much similar

335
00:18:23.119 --> 00:18:24.319
And then what happened?

336
00:18:24.469 --> 00:18:28.019
He successfully attracted tons of consumers

337
00:18:28.019 --> 00:18:28.820
How many?

338
00:18:28.820 --> 00:18:30.749
45 million consumers

339
00:18:31.199 --> 00:18:32.199
Then what happened?

340
00:18:32.449 --> 00:18:37.350
This sort of has raised more than 
$400 million as outside funding

341
00:18:37.560 --> 00:18:38.479
What do you think?

342
00:18:38.479 --> 00:18:43.479
Same solutions based on same problems

343
00:18:43.719 --> 00:18:45.119
But what happened?

344
00:18:45.119 --> 00:18:47.550
His timing was great

345
00:18:49.520 --> 00:18:50.479
Look at him

346
00:18:51.400 --> 00:18:53.560
Well, this is a kind of another example

347
00:18:53.560 --> 00:18:55.410
about this issue, timing

348
00:18:56.160 --> 00:18:58.800
So he thought a very interesting idea

349
00:18:58.800 --> 00:19:00.520
So we get online

350
00:19:00.520 --> 00:19:03.310
Then why not

351
00:19:04.410 --> 00:19:07.850
why not making group purchase of the single item?

352
00:19:08.000 --> 00:19:08.880
Then what happened?

353
00:19:09.530 --> 00:19:12.040
We can purchase tons of item

354
00:19:12.190 --> 00:19:16.539
Then we can get the discount 
because we have bargaining power

355
00:19:16.789 --> 00:19:18.920
So let's get online first

356
00:19:18.920 --> 00:19:21.430
So he created quickly his service,

357
00:19:21.430 --> 00:19:24.299
which is the letsbuyit.com today

358
00:19:24.420 --> 00:19:25.570
letsbuyit.com

359
00:19:25.570 --> 00:19:27.869
Let's buy it together, right?

360
00:19:27.869 --> 00:19:30.160
As long as we get online,

361
00:19:30.160 --> 00:19:33.969
As long as we purchase the bulk item,

362
00:19:33.969 --> 00:19:37.280
then we can get 20% or 30% discount

363
00:19:37.280 --> 00:19:38.880
Wow, it's really great

364
00:19:39.280 --> 00:19:40.239
Then what happened?

365
00:19:41.199 --> 00:19:43.800
Unexpected to his expectation

366
00:19:43.800 --> 00:19:45.610
Not too many people get online

367
00:19:45.760 --> 00:19:47.199
I'm sorry about that

368
00:19:47.199 --> 00:19:49.150
Not too many people get online

369
00:19:49.469 --> 00:19:50.319
They don't know what it is

370
00:19:50.319 --> 00:19:52.300
They don't know what is the group purchase

371
00:19:52.300 --> 00:19:53.900
They don't know the concept

372
00:19:53.900 --> 00:19:58.279
Its concept was premature, 
and they don't know what it is

373
00:19:58.959 --> 00:20:01.520
They don't want to get online

374
00:20:01.520 --> 00:20:04.250
They want to pay something online

375
00:20:04.350 --> 00:20:08.650
because they don't have any experience on it

376
00:20:09.039 --> 00:20:12.320
So that's why this business was not successful

377
00:20:12.820 --> 00:20:14.259
Then what happened

378
00:20:14.959 --> 00:20:16.950
After many years later, what happened?

379
00:20:16.950 --> 00:20:20.079
Somebody else initiated very similar businesses

380
00:20:20.079 --> 00:20:21.839
This is Groupon

381
00:20:21.839 --> 00:20:24.400
The Groupon idea is pretty much the same

382
00:20:24.950 --> 00:20:28.359
So we get online and make a group purchase

383
00:20:28.359 --> 00:20:29.880
Then we can get the discount

384
00:20:29.880 --> 00:20:34.479
This Groupon service was booming, was exploding

385
00:20:34.479 --> 00:20:35.319
And then what happened?

386
00:20:35.319 --> 00:20:38.759
Groupon became huge, successful company

387
00:20:39.409 --> 00:20:42.159
So anyways, he got the right problem,

388
00:20:42.159 --> 00:20:46.630
but his solution was great, but problem was timing

389
00:20:47.480 --> 00:20:50.950
His entering timing was too early in the market

390
00:20:51.600 --> 00:20:53.430
When you start your businesses,

391
00:20:53.880 --> 00:20:57.239
you'd better identify the consumer's problem very well,

392
00:20:57.239 --> 00:21:00.599
and also you prepare for the exact solution

393
00:21:00.599 --> 00:21:02.199
for your consumer's problem,

394
00:21:02.199 --> 00:21:05.549
and you need to think about when is the right timing

395
00:21:07.920 --> 00:21:09.000
Look at this example

396
00:21:09.000 --> 00:21:11.319
The left picture,

397
00:21:11.520 --> 00:21:15.589
the left picture is deep ocean fishing boat

398
00:21:15.750 --> 00:21:18.520
This is Dongwon. Have we heard about Dongwon?

399
00:21:18.770 --> 00:21:21.569
Dongwon is a well-known company in Korea,

400
00:21:21.569 --> 00:21:23.750
which is a great company for the tuna

401
00:21:24.000 --> 00:21:27.680
And then, the Dongwon started around 1960s

402
00:21:27.680 --> 00:21:30.849
Around that time, world number one, 
global number one,

403
00:21:30.849 --> 00:21:33.059
tuna company was Starkist

404
00:21:33.059 --> 00:21:34.719
Have we heard about Starkist?

405
00:21:34.719 --> 00:21:36.400
Delmont, America

406
00:21:36.400 --> 00:21:39.599
Delmont, America had Starkist

407
00:21:40.090 --> 00:21:45.410
So the Starkist is the branch of the Delmont group

408
00:21:45.800 --> 00:21:47.400
The Delmont orange

409
00:21:47.400 --> 00:21:52.400
Anyway, Starkist opened up a canned tuna factory

410
00:21:52.479 --> 00:21:57.179
in the island of Samoa in Pacific Ocean

411
00:21:57.760 --> 00:21:59.160
So this is a factory

412
00:21:59.160 --> 00:22:03.040
In 1963, Starkist Samoa factory

413
00:22:03.440 --> 00:22:05.400
So basically, inside this factory,

414
00:22:05.800 --> 00:22:08.559
The Starkist made a canned tuna

415
00:22:09.000 --> 00:22:10.520
And who supplied the tuna?

416
00:22:10.520 --> 00:22:11.929
Yes, of course, Dongwon

417
00:22:12.079 --> 00:22:15.599
Dongwon, the deep ocean fishing boat,

418
00:22:15.599 --> 00:22:18.719
catch the tuna a lot and supply most of the tuna

419
00:22:18.719 --> 00:22:21.869
to the Samoa factory of the Starkist

420
00:22:22.919 --> 00:22:26.229
Then the interesting thing is the Dongwon

421
00:22:26.229 --> 00:22:29.690
is the world number one tuna catching boat

422
00:22:30.640 --> 00:22:33.569
And they catch the tuna a lot

423
00:22:34.319 --> 00:22:37.169
No one beat their record

424
00:22:37.760 --> 00:22:40.719
Because Dongwon has some kind of great know-how

425
00:22:40.719 --> 00:22:44.000
and they had the skill to catch the tuna

426
00:22:44.000 --> 00:22:45.359
So there's so many people

427
00:22:45.359 --> 00:22:49.469
ask the CEO of the Kim Jae-chul 
of the Dongwon, why not?

428
00:22:49.670 --> 00:22:53.669
Why not starting your own canned tuna factory in Korea?

429
00:22:53.669 --> 00:22:54.599
Then you can make more money

430
00:22:54.799 --> 00:22:59.760
Why you just supply your tuna 
to the Starkist factory only?

431
00:23:00.319 --> 00:23:02.640
So is there any reason?

432
00:23:02.640 --> 00:23:05.520
Then CEO Kim Jae-chul replied

433
00:23:05.520 --> 00:23:07.830
those kind of questions like this

434
00:23:08.280 --> 00:23:09.920
Well, think about it

435
00:23:09.920 --> 00:23:12.439
Canned tuna is a great item,

436
00:23:12.439 --> 00:23:15.359
but only the country,

437
00:23:15.359 --> 00:23:18.209
only the country that exceed,

438
00:23:18.509 --> 00:23:24.609
that exceed, $2,000 as GDP per capita

439
00:23:26.479 --> 00:23:28.350
can consume the canned tuna

440
00:23:28.800 --> 00:23:31.820
Below the $2,000 GDP per capita

441
00:23:33.439 --> 00:23:36.629
those countries are not ready 
to consume this kind of tuna

442
00:23:37.079 --> 00:23:40.300
Korea, at that time, Korea's GDP per capita

443
00:23:40.300 --> 00:23:43.680
is way below than $2,000

444
00:23:43.889 --> 00:23:46.339
Then the Kim Jae-chul, 
CEO Kim Jae-chul said that,

445
00:23:46.889 --> 00:23:49.580
probably I expect to

446
00:23:49.930 --> 00:23:54.989
we expect to reach out $2,000 around early 1980s

447
00:23:55.040 --> 00:23:56.239
Then at that time,

448
00:23:56.239 --> 00:24:00.789
probably the Korean people are 
ready to consume the canned tuna

449
00:24:00.920 --> 00:24:04.560
Then, so we develop, prepare the factory,

450
00:24:04.560 --> 00:24:07.879
canned tuna factory in Korea before 1980s

451
00:24:08.079 --> 00:24:11.549
Then, we can start producing canned tuna

452
00:24:13.449 --> 00:24:16.720
Then the late 1970s, early 1980s,

453
00:24:16.720 --> 00:24:19.479
he prepared the canned tuna factory in Korea

454
00:24:19.479 --> 00:24:21.479
Then he started making canned tuna

455
00:24:21.479 --> 00:24:25.439
and supply the canned tuna to the Korean people

456
00:24:25.439 --> 00:24:26.760
because at that time,

457
00:24:26.760 --> 00:24:30.730
the Korea's GDP per capita exceed $2,000

458
00:24:31.280 --> 00:24:32.119
What do you mean by that?

459
00:24:32.119 --> 00:24:35.400
The Korean people are ready 
to consume the canned tuna

460
00:24:35.400 --> 00:24:36.319
Then what happened?

461
00:24:36.319 --> 00:24:39.899
Dongwon became the Korea number one 
canned tuna company

462
00:24:39.959 --> 00:24:44.119
Then later made the tons of money and save this money

463
00:24:44.119 --> 00:24:47.839
and purchase Starkist in 2008

464
00:24:47.839 --> 00:24:49.800
So the Dongwon right now

465
00:24:49.800 --> 00:24:52.720
became global number one canned tuna company

466
00:24:52.920 --> 00:24:54.520
This is the story

467
00:24:54.520 --> 00:24:56.000
Wow, what do you think?

468
00:24:56.000 --> 00:24:59.050
CEO Kim Jae-chul and founder of the Dongwon

469
00:24:59.050 --> 00:25:00.010
He's very smart

470
00:25:00.160 --> 00:25:03.090
He knew when to enter the market

471
00:25:03.690 --> 00:25:06.590
So although you have a great idea,

472
00:25:06.590 --> 00:25:08.029
although you have a great solution,

473
00:25:08.109 --> 00:25:09.659
but having great idea,

474
00:25:09.659 --> 00:25:12.010
having great solution is not enough

475
00:25:12.160 --> 00:25:15.819
You need to figure out when to enter the market

476
00:25:16.119 --> 00:25:19.040
So timing issue can kill

477
00:25:19.040 --> 00:25:21.479
or can save your businesses

478
00:25:21.479 --> 00:25:23.029
Please remember that