Two Types of Businesses: Pain vs. Vision

June 23, 2013

Being a wannabe entrepreneur trying to launch my first business, I have been exposed to a lot of entrepreneurial advice and tips lately. By talking to people, reading books and following entrepreneurship classes, I have learned to focus on the things that truly matter and to stay on track while exploring my idea. One thing I observed during this process is that from a high-level perspective you can basically classify most businesses down into two categories: they are either pain-oriented or vision-oriented. Although this has probably been described by many other people in a much more profound way, I personally found this an important distinction to realize and to be aware of.

  • By solving actual problems, most companies inherently share the same goal. Each company does this in its own way, whether they sell hamburgers or develop high-tech water pumps for space capsules. Bottom line is that companies are all oriented towards solving a certain problem, hereby responding to a need that people or other companies have. The bigger this need, the more money they are willing to pay for it.

    Therefore, the most `straightforward' approach when starting a company is beginning from an existing problem and respond to a need that people have to get this problem solved. This is a pain-oriened type of business because you basically identify a real, already existing pain and provide a solution that removes this pain. As long as you keep this pain in mind while building your product, chances for success are substantial. This is because people are already convinced of the pain they have, so all you need to do is to convince them that your product is actually helping them. Of course, this is easier said than done. A great post of Pieter Eerlings describes this approach really well.

  • “If I had asked people what they wanted, they would have said faster horses.”

  • Sometimes, however, people might not always be aware (yet) of a certain pain or need they have. Henry Ford once said: `If I had asked people what they wanted, they would have said faster horses.' Tablets are in my opinion another example of this. Before tablets were around, all what people thought they needed were lighter, smaller laptops; definitely not something like a big-screen smartphone. However, Apple saw things differently and created a need for tablets by showing people they actually wanted a tablet instead of some crappy netbook.

    When being a vision-oriented type of business, everything starts with a disruptive product or technology. Something that is absolutely different than existing alternatives -- if these already exist. People are not yet aware of their need for this and as a consequence, they will be extremely skeptical about it because they fear change and are not as visionary as you (think you) are. Only after building this product and showing it first, you might win these people's trust and be able to convince them that this is actually what they need. If your vision does not bring a significant added value in comparison to existing alternatives, you're probably not going to make it.

    It's clear that vision-oriented types of businesses are much harder to build because you are not only required to put effort in building your innovative product, but also in convincing people that this is actually the product they have always dreamed of. Chances for success are rather low, but if it works, money is most likely going to roll in.

    Starting a company is hard and failure is never far away. Starting from a product that solves an existing pain is often more easy than convincing people of a pain they are not yet aware of. Of course, in reality, no entrepreneur explicitly choses to be either pain or vision oriented. Depending on your idea, it just happens.