How To Determine If A Problem Is Worth Building A Business To Solve

by Tim Jahn on February 15, 2011

Emily Chiu and Chiara Piccinotti created Apply in the Sky to help students manage the MBA admissions process.  They had plenty of other ideas for businesses but they determined this problem was worth building a business to solve.

In this interview, Emily and Chiara share how they decided their problem was big enough to warrant building a business for, and what sort of techniques they used to validate their solution.

Transcript

Tim Jahn: Before Apply in the Sky, Emily was working as a M&A banker and Chiara was working at CBC Interactive doing biz dev and product management. And to me those, those aren’t really related to the MBA process. So how did you two end up trying to make the MBA admissions process easier to manage?

Chiara Piccinotti: Do you want to talk about it?

Emily Chiu: Yeah. You know, it’s actually quite relevant because these are two career paths in which people tend to apply for school after their programs are over. And so it’s pretty typical for people in M&A or for people in corporate worlds to kind of reevaluate where they’re at in their careers and in kind of that timeframe.

So this was actually a very personal project based on our own personal experiences applying to school at this time. And it was sort of a transitional time for both of us as we were figuring out next steps in our own careers and education.

Chiara Piccinotti: And also the entrepreneurship bug had kind of gotten Emily and I ever since we’ve known each other — we’ve been friends since we were in college. And there was always lingering that idea that at some point with the right idea, we wanted to build something together. And it went from, maybe we should write a book to like let’s try thinking about companies that we think are cool and this one kind of really kind of became this labor of love that we really wanted to do.

Tim Jahn: Did you have other ideas before when you were thinking of starting a company? Did you go through a whole few pages of ideas before you settled on this one?

Emily Chiu: Oh absolutely. I think over the past year and a half leading up to us starting up this company, we had ideas for about ten different companies. And I think that’s what happens when you live in San Francisco is you’re just so surrounded by entrepreneurs. Yeah, you’re so surrounded by people building things that I think you look pretty critically at problems that you’re encountering your own life, and think entrepreneurially about what you uniquely can do to solve these problems.

Chiara Piccinotti: So, we wanted to change the travel industry. A website for people into wine. We had ideas of disrupting publishing. But I guess the good thing about having the background in finance is we would kind of sit down with pen and paper and think like, can we execute this and we were, you know we were almost like our first screen on can we do this or can we not. And so we’re brutal in our ideas until we came up to one that we really believed in.

Emily Chiu: Yeah.

Tim Jahn: Okay. So you both had this experience of going through the MBA admissions process and realizing that there was room to improve this. How do you know when your problem is big enough to warrant solving? A lot of people have problems and they think they might have a solution. But how do you know when your problem is big enough that you need to solve it?

Chiara Piccinotti: Definitely it’s like on our part, you often apply to school with other people. It’s not like some — it’s other people in your age that are also going through your time in life. And the pain was shared and just the amount of griping and upsetness that you’re experiencing and your friends are experiencing was very, very clear.

Then of course after that, we knew we had to kind of take it away from our own personal perspective and actually get some outside feedback on it. So you know, we shopped around the idea, we talked to other applicants. We actually built a small alpha of kind of kind of a concept of our product before we went out and built the real thing. And with the good feedback from that and people saying, “Wow, I wish I had it back when I was applying.” That made us think, okay, this is not just in our heads.

Emily Chiu: Yeah and I think –

Tim Jahn: How long did it take you to build that initial alpha?

Emily Chiu: It took us about three months so it was very like quick and dirty and we really believe in iterating quickly. And we built this very rough draft to be able to bet our ideas so we can make the kill or go decision very quickly.

Tim Jahn: Okay, so you right away were thinking, let’s get something out there, let’s see if anyone else is thinking what we’re thinking and then we’ll see where to go from there?

Emily Chiu: Absolutely. Yeah, and you mentioned an interesting point with how do you know when your idea is something that’s worth building. Because we built this really quick alpha in three months. And once we put it out there, our technical guy actually came on board because he was trying to solve the same problem across the country from us. And this was based on his experience going through the MBA program and how painful it was for him.

So I think you also know that you’ve hit upon a major pain point when other people are also trying to solve, you know, similar issues that they’ve encountered. And when you’ve gone through the process and six months of your life is sucked up by just the massive pain of going through these applications, I think you pretty much know from personal experience when it’s something that you really wish there was a solution for.

Tim Jahn: How did you find him? How did you find that there was someone else working on the same problem?

Emily Chiu: Well, when we put it out there it was almost like a beacon. He found us through however he found us. He just got wind that we were building something and it was exactly what he was working on in parallel and he connected through six degrees of separation on LinkedIn and found us. And it was just a really a meeting of the minds.

Tim Jahn: You found Kevin Bacon and then he found you guys.

Emily Chiu: Yeah exactly, I think that’s right.

Tim Jahn: So one way you know it’s a big enough problem is when someone across the country is also working on the problem. What — was that a huge push forward for you guys when you’re thinking, you know if someone else is devoting a ton of time and effort towards this, I’m glad that we are too. And then you just decided, well he should join us.

Emily Chiu: Yeah.

Chiara Piccinotti: Yeah, exactly. It was kind of very much that thought process. And it was reassuring just see that somebody else is in exactly the same experience. What was kind of amazing was also we came away with a lot of the same ideas about the market and about the problem and about how to help people. And that was quite amazing that we — there was actually so much just convergence among our, between our ideas and that also validated them. It was not like he was taking it from completely different standpoint. We agreed very much on what was needed.

Tim Jahn: So since you have the idea, you find Ryan who also happens to have the idea and you realize there’s three of you thinking the same and you guys got feedback from other people. How many people did you get feedback from though? Are we talking a few friends and family or did you guys go out and do a whole survey? Or I guess my question is beyond you three, you had to have some more validation before going forward. I mean, you two are very smart, you have the experience you know that before kill or go you really have to have a reason to go. What other feedback did you get?

Chiara Piccinotti: I mean, here’s a lot of it. I mean, I’m in business school now and so a lot of it was even reaching out to people there and that’s just obviously this huge pool of a thousand people who just went through the process. And so we shopped it around and we got the good feedback and the bad feedback, and how people thought it was useful and how people might not think it was useful. And, and getting the good and the bad has also helpful because it gives you perspective to know that you can trust you know also the good sides of it and then also ways to improve. So there was definitely a lot of that, a lot of like I wish I had this when I was applying.

Then we did online surveys. You know we reached out people who signed up and did a survey about their experience applying to school. This was before we had even built the alpha site and started getting a lot of hits online and a lot of people signed up. It was like we’re going to build this product and it was not a pretty site, it was something we just scrambled to put together on the Yola in like two minutes.

And even with an ugly site that was not promising in and of itself, people were responding and they were like, “Let us know when this comes.” And even throughout like we, we get a lot of good feedback from our users. And sometimes they want things done differently and they say, “Could I also get x?” But they like it and they, we get a lot of like, “This is great, this is really useful.”

Emily Chiu: Yeah, I’d say we also spoke to a lot of other providers in the space. So we spoke to admissions consultants, and these are people who MBA applicants pay anywhere from $2,000.00 to $10,000.00 each to get admissions advice on how to enhance their chances of getting into school. And speaking to these consultants despite how much they charge per student, they didn’t see the value we provided as something that was there core value.

So it became very clear to us even in a space that’s pretty crowded with a lot of different service providers who charge a lot, there was a big window for, you know, just the organizational tools and the tools that we found ourselves lacking. It was very validating to hear other service providers say, “Yeah, absolutely, this would be something that even we would find valuable because it’s not a core service that we provide.”

Tim Jahn: So it became, it sounds like it became pretty clear that you guys should go forward with this based on all this response from all angles of the industry. So what did you do next? After you went to the admission consultants, you went to the business school students, you found Ryan.

Chiara Piccinotti: Well, so even before we found Ryan actually we first built our, just our beta site outsourced so it was really a moment where Emily and I knew we had something we believed in but at that point we just had to, just do what we could, bootstrap, find what savings we had to get somebody to help us build it. And we, we actually met Ryan in the course of this but in the beginning it was a big leap of faith.

We started sketching out our own wire frames and because we didn’t have somebody on board who could that, we didn’t even have someone with necessarily technical experience right at the beginning so we did what we could and we used the tools that we had and we just started drawing and writing specs and then you know and with that we managed to find like a team of people that we really believed to help us start building it and soon after that Ryan came on and took over the development process.

Emily Chiu: Yeah. I’d add to that like it’s, I think it’s really important for entrepreneurs to have a pretty clear product vision from the very get go whether or not they’re technical people who can build it out. Like we’re — neither of us have engineering backgrounds so for us to utilize an outsource team, I think for entrepreneurs to think that they can just have some vague idea and have an outsource team build it is kind of a fallacy.

For us we just had such a clear idea in our mind that we literally could sketch it out, describe it to you 100 ways, we spec’d it out in like 180 page document with every single view of what we saw each tool doing. And so I think the two of us just had such a clear picture in mind that it made the whole outsource process a little bit easier; not to say that they’re aren’t challenges with the process. But I definitely think it’s very important for entrepreneurs to have a very clear idea of what they’re trying to build in their head from the get go.

Chiara Piccinotti: Oh, we can’t hear you.

Tim Jahn: Oh I’m sorry I had the mute button on. I’m sorry about that. I was saying, so you guys don’t have an engineering background or a development background which I think is very common among people that are entrepreneurs that are starting sites or ideas like yours. So you have to either find a friend or like you said before, you even found Ryan you had to outsource it. How do you gauge whether or not a developer or a development team is any good if you don’t have any development experience to gauge that on?

Emily Chiu: Well, I think part of it is we’re lucky being in the Bay Area, we have a ton of resources like friends with technical backgrounds, friends who have started companies, built sites. And it’s really important I think to canvas people who have had experience doing this to learn what are the kind of questions you should ask. And even if you don’t have a technical background to get enough up to speed where you can at least gauge ballpark what people are talking about so it’s not like you’re speaking completely different languages.

And you know it is tough. Like even having that like all the right questions and evaluated sites that they’ve built in the past and have, I think having a clear spec also really helps. Like we had a 100 page document on exactly what we wanted to build. So it was a matter of finding someone who could deliver on that. And yet it’s still tough and sometime you just don’t know how it’s going to pan out until you kind of get your feet wet.

And so hopefully you can sequence it where you have many different releases and quick releases so you can start gauging the quality of their ability to deliver before it’s like ten months in and you’re like shoot, like this really didn’t work out.

Tim Jahn: What I gather from you two is you’re, like I said you’re very smart ladies and you have experience. But it’s the importance of constantly connecting with others. I mean, from the beginning when you were getting feedback you, I mean the amount of research you guys did is, I think is important but I don’t think everyone always does that.

I mean, you talk to all these people, you’re constantly asking for — you know, with development asking others, “You know, what did you guys look for in developers, what should we do?” How important was that for you guys and is that for you guys in moving forward with your product, the idea of constantly talking to others?

Chiara Piccinotti: It’s been huge. And we’re very fortunate in that we also have some great advisors and people that have been mentors to us in the process. And entrepreneurship can become an isolating experience if you let it. But if you don’t, it’s like I think we’ve always taken the more we talk about the idea, the more it grows. And we have found really interesting feedback and great ideas coming from so many different resources; some that we didn’t even know that we could get. So I think it’s extremely important going forward.

Emily Chiu: Yeah. I think as entrepreneurs like you’re always learning on the go and you’re always tasked with so many challenges and so many different elements of business that you never have all the answers. And like Chiara said, it’s just like you’re surrounded by great resources and it can be isolating if you view it and yourself in a vacuum. But the more you reach out you’ll find just the wealth of information and people and people really willing to share their learning’s and their insights from past experiences that can also be a really great learning experience just reaching out to the people around you.

Tim Jahn: Was there ever a moment when you were getting feedback from others and getting their idea on your idea that you ever thought, maybe this problem isn’t the one to solve? Was there ever kind of a bump in the road where you thought, maybe we shouldn’t go down this road?

Chiara Piccinotti: Not so much with this product. But we have thought of a lot of different ideas in the path and then yeah, and some of them we killed because they just seemed like they were a great idea in our head and we talked to people and we’re like, hmm. And so you know you always feel a little bit of pride on your ideas but it’s just important to think people are smart and they have opinions and we can’t just build something for ourselves. And so we took that advice and we’re glad that we did.

Emily Chiu: Chiara killed my early idea of the onesie. Like kind of the blanket onesie.

Tim Jahn: The blanket onesie? Is this like a Snuggie?

Chiara Piccinotti: We wanted to make it global.

Emily Chiu: And that didn’t work out so well.

Chiara Piccinotti: Kind of a bad idea.

Tim Jahn: How do you — so that brings up a good point though because you said you had past ideas that you know you just realized they were just for yourselves, they weren’t going to go anywhere. I think that’s common where I guess what’s the threshold that you know that it’s not a good idea because and you know the problems not big enough to solve and you should move on. Is it when ten people say no, when 15 people say no, when five of the most important people in your life say no? You know, how — I guess simple question but at what point do you know?

Chiara Piccinotti: See this one I don’t know what to say. I mean, when we came up with Apply in the Sky we actually had two ideas that we were thinking about. And it wasn’t so much about knowing when there’s a no, but it’s more about that spark of the yes. Because we, we were playing around with so many ideas and you tell people are people are like, “Well that’s interesting. Well, let me know how it goes.” And then when we started thinking about this idea of empowering people through organization workflow management to help achieve these educational goals, there was a spark.

And sometimes it, you know, it even seemed like a smaller idea than say, “Let’s change publishing in a certain way”. But we talked about it with somebody and we thought that we were pitching the other idea and then just kind of the fly we’re like, “Oh and we also have this idea about helping people applying to school.”

And we saw that expression that kind of like, oh, well that’s interesting. And maybe it was that spark that kind of made us think, this is different, this is a different reaction. And so, and even for us, like we immediately had this idea in our head of what it would mean. It was less of a concept and more of something concrete. And I think that’s what pushed us forward to just like maybe this one is really worth doing.

Emily Chiu: And I think there’s that spark because it was personal to our experience and excruciating pain points that we were going through in our life at that moment. So it really did solve something that was really fun and centered in our own experience which made it a lot more tangible and doable from an execution point of view; something we really understood in and out from the perspective of the people we were trying to cater to. And that makes it, that made it very different than you know, trying to tackle something in the travel industry particularly if you don’t have a background in travel.

So I think I have friends right now who now want to start companies and leave their day job. And for them, I’ve seen some of these brainstorming sessions where they talk about what markets are hot, what are the list of things we’d like to see. And it’s just so high level. I think the thing you’re solving has to be really personal to you, relevant to you and solving something that is a real pain point and not something tangential. You know, I think you really have to believe in it and live it for you to be able to execute on it properly because there are plenty of great ideas and it’s all in the execution.

Tim Jahn: Yeah, and I’ve found that from so many other creative entrepreneurs that you know ideas are a dime in a dozen or very common, it’s all in the execution. And I think the most successful companies like you said come out of personal, real problems. Something like you guys have experienced this, now you’re going to solve it and hopefully no one else will have to experience it again. You’re pretty early in the process in terms of you know as a company.

So you got a lot of feedback early on when you were still developing the idea, now you’ve actually executed and begun execution. What are some ways that you continue to get feedback from people in terms of seeing that you’re on the right path and that you’re still focused on that problem you initially wanted to solve? What are some ways you still get feedback?

Chiara Piccinotti: Maybe reach out to our users. We’re in constant dialogue with the other partners that we have in the space, like admissions consultants or other service providers, and we keep that dialogue open to keep just making sure that were offering something of value.

Emily Chiu: Yeah, and we really, we try to personally email almost all of our users to an extent possible to solicit feedback, to ask them what schools they’d like to see added, to ask them what issues they’ve had with our site. So we’re really big on serving our users, serving people who aren’t users or who have signed up and aren’t using the product and we monitor these things pretty actively to figure out what we could be changing real time.

Tim Jahn: So okay, so it sounds like you’re just doing more of the same. I mean, from what you did from the beginning just constantly asking the users, asking the people that you know you view as advisors and just making sure that everyone is in agreement that you’re still solving their problem?

Chiara Piccinotti: Yeah.

Tim Jahn: Sounds good. Sounds easy. There’s got to be something –

Chiara Piccinotti: No, it’s not easy –

Tim Jahn: What?

Chiara Piccinotti: Well, we kind of do what has worked so far.

Tim Jahn: What would you –

Emily Chiu: It’s not easy but it’s funny, we use this one metric where people can love your product, they can hate it and kind of in between they could just not care. And from our perspective both great feedback we’ve gotten and really bad we’ve gotten is all valuable. Because to the extent that sometimes bitching about your product, it’s great. That means they care, it’s solving a pain point, they want you to fix something so they can continue using it. It’s really in-between when you don’t hear about people and there’s this you know –

Chiara Piccinotti: Silence.

Emily Chiu: — silence that you should be worried.

Tim Jahn: That’s a really, really good point you bring up. That even the worse, the users that are saying the worse things about you care more than the people who are saying nothing. That’s a great point.

Chiara Piccinotti: Right. And we do, we have those sometimes. And it’s just, and that — I think it also speaks to the pain and the need right. If you’re writing your application and you really want something to help you and it doesn’t, and you will actually will go out of your way to email the cofounders of the company to let you know that they were not able to solve that need. Sure, we would love to be able to offer the perfect thing to everybody at every time. But the good side of it is it reminds us there is a need, it’s enough of a need that people want us to do this better for them.

Tim Jahn: That’s a great point. What would you say is your one piece of advice for creative entrepreneurs who, you know, like you said, you guys have friends who want to quit the day job and start the company. What’s your one golden piece of advice for them?

Emily Chiu: I’ll let you go first.

Chiara Piccinotti: That’s a difficult one. Definitely one that I tell people is to talk about their idea and just to get as much feedback as they can. Sometimes people come to me now that I’m in business school, there’s a lot of aspiring entrepreneurs in business school and people come up to me and they say, “I have this idea.” I’m like, “What is it.” “I’m not sure if I should say. I mean, should I say?”

And when people have that, that attitude that we need to keep things secret I tell them to talk about it. I know there’s nothing better than to get other people’s feedback or just build upon ideas with other people. You have idea, you could start with something and then it just grows into something bigger, and it takes on a life of its own. I think Apply in the Sky kind of took on a life of its own for us as we started talking to people and getting that positive feedback, and then we felt compelled to keep working on it. Had we never said a word to anybody, we might, we probably would not be at this point.

Emily Chiu: Yeah. And I’d say like be sure that it’s an idea that you’re really committed to and that the whole idea of entrepreneurship, it can sound fun, it can sound — you know it has its perks definitely, but there are a lot of really rough moments which require a lot of commitment on the part of the person kind of going down this path. And I think it just takes a real commitment to your team, your cofounder, and to idea. It really has to be something you believe in for you to I think push through some of the tougher moments.

Because there are a lot of really tough moments. And I think to commit to it and really bootstrap it and put your savings behind it; you know, it just takes a lot of commitment and passion to push through some of the tough moments because people always talk about the ups and downs of entrepreneurship, and how it can just be a completely emotional experience where one day you think you’re building the greatest thing and the next day you’re really just questioning the viability of your next day. And I think it just takes a lot of like kind of understanding that you’re going to go through that upfront to commit to the process and be okay through the ups and downs.

(photo credit)

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