Tarpit ideas? Tarpit problems are even worse!
Here are 7 problems not to fix as a founder
Tarpit ideas are startup ideas that attract a lot of startups, but 99% fails. I’ve written about this concept before, here are 10 examples of bad startup ideas.
However, tarpit startup ideas are often (terrible) solutions. After working with over 1000 founders, I’ve seen another side of the coin: Tarpit Problems.
Tarpit Problems
A tarpit problem is a problem without a solution, that attracts many founders, but nobody is able to create a viable business around this problem.
Below are 7 examples of them and why I’m frustrated with them.
1. Leftover resource problems
For this tarpit problem, a founder sees a residual product of a supply chain, and feels that’s wasteful. That surely can be used for someting else? I’ve seen it for:
The low-quality whool remnants that are leftover from shaving sheep
Deprecated windmill wings are hard to recycle: surely we can do something with it?
Glass liquor bottles are gorgeous, why throw them away when we can upcycle them?
Beyond some very small scalle artistic projects, this often doesn’t grow into a viable startup.
In 99% of the cases, the founder is inexperienced in the industry. The founder overestimates the value of the residual product. Nobody in the supply chain cares about the residual product, as it’s considered worthless. Also, when applying in other target groups, nobody bats an eye.
You didn’t strike gold, you struck garbage. Throw it out. There are some companies that specialise in recycling such streams, such as Renewi, but they do multiple experiments over many streams.
It’s extremely hard to find value in waste. A startup I mentored turns thrown away festival tents into fashion bags. They sell out fast. Their designs are pretty cool, but it’s a tough business to scale to millions of products.
Plus side of startups like this: they do well on social media because of some political dogmas and virtue signalling. Go try. Save the world. Get likes.
2. The problem that actually is a governmental issue
In this category, founders want to do something good. They do an analysis of society, and identify dire problems. What pops up: Homelessness. Income inequality. Yada yada yada.
These are important issues yes. However, there’s little money to be made in homelessness or income inequality as a startup. Check out the opening chapter of this book for an example.
Yes, you might start a charity, or an organisation that does very helpful projects for society. However, startups are groups of people looking for a scalable business model. These things don’t scale. Go start that initiative, but don’t expect rapid growth.
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3. The ‘I don’t understand supply/demand’-problem
I’ve seen this startup pitch 10 times at least: a lot of the shipping trucks go back empty. They drive all the way from the Netherlands to Spain/Czech Republic/Albania, but come back empty. Can’t you optimise this?
On paper, it sounds like a problem to solve. In the end this problem is very hard to solve because a couple of reasons:
Startups in a very fragmented market have a hard time to get all logistical partners on board; optimisation within company can be achieved but broadly across an industry it’s hard.
Some countries just produce more. China ships more shit to Europe than vice versa.
Basically, these are founders missing basic economic principles of supply and demand. I’ve seen pitches for a housing matching platform to fix the housing crisis. Not a single platform is going to overcome the lack of houses on the market in most Western countries. Period.
4. The 'information overload’-problem
The narrative for this issue is: consumers want to improve themselves, but there’s so much information online, they don’t know where to start.
I’ve seen this for mental health, sporting, making more ecological decisisions in the supermarket, buying responsible make-up.
The underlying assumption is that people would act differently if only they had the right information. Mostly it’s progressive leftists that feel that the world is manufacturable in such a way: If only more people knew what I knew, they would act differently.
But when we are serious: 98% of the things we buy are not because of ideological reasons. That’s just a very small market.
We buy many things, but less than 1% of people offset their carbon when buying an airline ticket. Sure you have your sustainable butter, but that’s in an elitist bubble. The masses still don’t care.
I always provoke these founders by asking: how many of your users have done a Google search on the knowledge they are missing? If they can’t be bothered to do a Google search, how urgent is this problem then?
Selling knowledge is hard to begin with. There are not a lot of companies that can sell knowledge. Scientific Journals have some kind of stronghold there, some newspapers, a few apps with curated ‘knowledge’ content (perhaps Headspace, or Curiosity). But landslides: not all.
5. The ‘lack of overview’-problem
Also known as the: ‘not everything in one place’-problem. This problem pitch goes as following, often aimed at (middle)-managers as a customer segment, with varying lines:
“There’s so much data. SOOOO Much data. What to do with all this data? We make a dashboard that integrates ALLL DATA. Everything”.
They will claim that the manager in question lacks overview. Because somewhere in one customer interview somebody mentioned that. But, the underlying problem is unclear.
Why is it a problem that everything is scattered? Sometimes founders make a new SaaS product that goes like:
“Currently, this marketing manager/SEO manager/email campaign manager is using 6 tools to manage their campaigns. Luckily [sarcasm], we integrate everything into one tool”.
This problem always leads to the Swiss-army knife trap. 25 features, targeted at 26 IDEAL CUSTOMER PROFILES. You heard that right.
26 IDEAL CUSTOMERS. Who wouldn’t want that? Well, often their actual paying customer count is 0. Because targeting doesn’t work when you try to use a shotgun to hit a long range target. But go at it!
6. The blockchain-problem
It’s a problem to use blockchain. I just wanted to shit on blockchain for a bit. There are almost zero situations in which blockchain is superior to a traditional database.
“But Jeroen, in this supply chain TRUST is low and BLOCKCHAIN verifies trust”.
Yeah it verifies transactions, but if your data input is done by a human being, you can still verify bs information. This problem of quantifying an entire supply chain is way harder and mostly a sensor or empirical data input problem, not a database issue.
I’ve seen startups aiming to make the avocado supply chain more transparent. Downside is, almost nobody cares. Also you don’t. Why? You are buying intransparent avocados right now.
See? Would you pay 25% extra for an avocado you can look up its source on a blockchain? Sure you would buddy.
“But Jeroen, WEB3 [..]“ - Shut up. I don’t care about the epistemological challenges you face in separating your beliefs from facts. Go see a psychologist or a philosopher, both might help.
7. The ‘virtual startup mentor’-problem
In the past 6 months, I’ve been pitched some kind of SaaS, AI, LLM that aspires to replace startup mentors.
Usually, it’s a retired founder, that did some kind of IKIGAI voodoo magic and figured out all he knew was building businesses.
Therefore, he (often it’s a guy, unless not, shoutout to Els from withsam.ai) wants to build a product that helps founders build a product.
For now, I’ve seen this problem so five times in the last six months. A startup called CoCraft pivoted away from it, now focusing on market intelligence – A startup called Aviato pivoted towards that too, coincidentally, from a VC-Founder matching platform.
Plus, anyone can use LennyBot for free, it’s basically a startup mentor in ChatGPT.
“But Jeroeeeehoeeeen, you are a startup mentor, aren’t you just crying because they are trying to replace you?” - (Sorry to steal this Shaun, I get why you do this, so much fun!)
I get this. Hear me out: my PhD revolves around understanding the design and creation of startups. In my recent study (to be published), I’ve described the vast complexity of startups and how that creative process evolves.
I’m very open to learn how this could be approached by a piece of software, but this is why I think it’s hard to crack.
Founders don’t plan ahead; research shows they do ‘Just in time learning’, i.e. “I need to solve THIS startup problem TODAY”. They won’t do a legal course just in case 24 months down the line they need to understand why Avocados are legalle a vegetable (or legally a tomato, let me check).
It’s incredible hard inject yourself into the day to day of a founder, because, especially first-time founders, they are usually all over the place. Perhaps they have a ticketing system for a product backlog, but that’s about it. No structured strategy or roadmap.
Why do I feel this way? How many founders do you know how actually following the steps of Build-Measure-Learn, BMC, Lean Canvas, Disciplined Entrepreneurship?
Not too many, I think. That says a lot. Not sure if these models can make it so much easier it will replace the founder’s to do lists.