Michael Seibel explains why founders pick the wrong customer: they ignore how often and how intensely the problem actually happens. Car buyers shop every seven years, but dealers face daily pain. Design for whoever hurts most, most often. Uber works because the problem is both frequent and intense.
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What's so surprising is when you talk through startups with people, sometimes they choose problems without quite understanding who the user is or the frequency of the problem. So I'll give you an example. A lot of people will come to YC and a popular idea back in the day was to build a car shopping website. Now, if you guys have been on car shopping websites, especially about five years ago, they all basically suck. They're hard to use, they're not very transparent. You kind of want to have this almost Tesla experience of just buying a car, but they never actually work out that way. And what's interesting is that, like, a lot of founders come back to this problem over and over and over again, and they always think that their customer is the person buying a car. Now, the reality is that when you go buy a car, assuming it's not a complete lemon, you typically keep that car for seven years. So what happens if I told you I'm gonna create a startup and if I home run with my customer, if my fucking customer loves me, they're gonna come back seven years from now? That's hard. It's very hard. It turns out a lot of the car buying websites are not built for the person who's shopping for a car because that person doesn't have a problem very often. They're actually built for the person who's selling a car. That person has a problem every day. Every day. The dealership has to hit their numbers. And so you don't see as a customer how that product helps the real customer, the person who's trying to sell cars. And so by doing this analysis, I really try to push founders in understanding who is getting the most value out of this product. And it's really helpful if you're trying to help someone with a problem they have. Frequently, if you think about the products that you use on a daily basis, they tend to be on the front screen of your phone. You tend to use them without even thinking. They become almost extensions of you. If you think about apps that you've installed and then they're kind of on the third page in the back, or they're buried on the second page of some folder, those tend to be the ones you don't use very often. Hopefully they don't need you to use them very often, or else they're probably not very good businesses. The next question I always ask is, how intense is the problem? I find a lot of founders think they have a good idea, but they don't do this frequency and intensity analysis. And so if you have both an infrequent and low intensity problem that you're trying to solve, you're going to have a problem getting a lot of customers even interested in talking to you. All things meaningful, if you graph problems, it's nicer for them to be higher intensity, higher frequency. Let's think about a company like Uber, for example. Usually when you are somewhere and you need to go somewhere else, it's a pretty intense problem. I have to go to work, I have to go to the doctor, I have to go pick up my kids. They're so intense. You might have bought like a $20,000 car to help you do those things. Right? So it's an intense problem. And then when you think about frequency, how often do you move more than a mile more than walking distance? Every day. Happens a lot. And so if you think about that, even though you look at the taxi market and you say, oh, taxis, you know, before Uber taxis, that's not that big of a market. If you just look at the customer, you say, high intensity problem, that happens very often. There's probably a good business here.
