The pleasure principle – companies shouldn’t only focus on pain points

Perna Gupta is the CEO of Khush, the developer behind the music creation iPhone app LaDiDa – an app which has been downloaded 270,000 times and is unashamedly about having fun.  She wrote a guest post on Techcrunch on Sunday complaining about how her company had got to the final stages of two prestigious start-up competitions, been the audience favourite, but been dismissed by judges because she isn’t solving an obvious pain point.  In her words:

Earlier this year, my company advanced to the final stages of two prestigious start-up competitions. Both times, I got up on stage and belted out my prezo in C Major (our product is LaDiDa, an iPhone app that helps bad singers make music), and then backed up the singing with solid growth metrics on our business. The audience loved it, and LaDiDa was a crowd favorite to win in both contests. But when it came time for the judges’ feedback, I was frustrated to hear a familiar refrain: “Your demo is great, really cool app,” they said, “but we can’t give you this award because your product doesn’t solve any obvious pain point.”

In the rest of the post she goes on to argue that investors’ focus on pain points is resulting in a lot of worthwhile companies not getting funded.  As she points out, Twitter and Facebook weren’t about solving pain points when they started.  Nor are the pornography, sports and coffee industries.

As an investor I love a business that solves a clear pain point as much as anyone.  When pain is being removed it is much easier to be sure that a market is there, but I think our major pain points have largely been solved, and targeting pleasure, or happiness is increasingly going to be where the action is.

For most consumers the burning question is ‘how can I be happier’ rather than ‘I wish I could get rid of XYZ irritant’.  And LaDiDa makes people happier, it is fun, it promotes togetherness and sharing, and it makes you a better singer.  What’s not to like?

Check out this promo video from their iPad app to get a flavour (and this is a fun experience too…)

For more on happiness I recommend this presentation from Tara Hunt.

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  • Good point Nic, a crucial one indeed, because solving a clear, real pain point (not a made up one just to say so) is a great start for a new venture and helps diminishing the risk for the investor.

    However, let me be a bit critic (constructively hopefully) towards your ‘people’ in the investment industry.
    Sometimes I feel like they tend to repeat some key concepts without even thinking about them anymore… traction, addressing a pain point, track record, etc.
    Don’t get me wrong, these are all ‘sacred’ things (and the money is theirs after all), until they start to blind the ability to evaluate early stage investments correctly. In other words, expecting too much proof from a start up prevents potential good ideas to be funded (as said in your post) and raises the bar of ‘early stage’ investment up to a point where the risk for the investor is so significantly reduced (in theory at least) that to me it’s sort of defeating the purpose of early stage investment! I’m not advocating policies of reckless gambling on start ups, but a bit less conformity among investors and more decisions driven by genuine gut feeling and passion would be a great boost for the industry, especially when we’re talking of investments below $1m.

    One last point, I’m a strong believer of companies which can create a new need in the market instead of addressing an existing one or fixing a problem. They are one in a thousand or more, but they have the potential to be really big and disruptive (another VC karma), but applying the concept of no-pain-point-no-funding these potentially revolutionary companies will struggle to start. And when they succeed in doing it investors get in at a much higher evaluation, hence losing an opportunity.

  • Good point Nic, a crucial one indeed, because solving a clear, real pain point (not a made up one just to say so) is a great start for a new venture and helps diminishing the risk for the investor.

    However, let me be a bit critic (constructively hopefully) towards your ‘people’ in the investment industry.
    Sometimes I feel like they tend to repeat some key concepts without even thinking about them anymore… traction, addressing a pain point, track record, etc.
    Don’t get me wrong, these are all ‘sacred’ things (and the money is theirs after all), until they start to blind the ability to evaluate early stage investments correctly. In other words, expecting too much proof from a start up prevents potential good ideas to be funded (as said in your post) and raises the bar of ‘early stage’ investment up to a point where the risk for the investor is so significantly reduced (in theory at least) that to me it’s sort of defeating the purpose of early stage investment! I’m not advocating policies of reckless gambling on start ups, but a bit less conformity among investors and more decisions driven by genuine gut feeling and passion would be a great boost for the industry, especially when we’re talking of investments below $1m.

    One last point, I’m a strong believer of companies which can create a new need in the market instead of addressing an existing one or fixing a problem. They are one in a thousand or more, but they have the potential to be really big and disruptive (another VC karma), but applying the concept of no-pain-point-no-funding these potentially revolutionary companies will struggle to start. And when they succeed in doing it investors get in at a much higher evaluation, hence losing an opportunity.

  • Less conformity amongst investors would be helpful but unless there is magically more upside (reward) then a focus on reducing risk via analysis is the only way forward for investors who need to make more money than they have historically – which is most people in the industry.