How painful is the problem you are solving?

Key insights from a highly successful deep tech entrepreneur, with $100m turnover and a $1.6bn valuation.

Liran Zvibel, CEO of deep tech company WEKA, was asked in an interview to clarify the difference between deep tech and non-deep tech, using the famous ‘Field of Dreams’ line, “if you build it, they will come.”

The interviewer suggested a distinction: in non-deep tech, the question is often not whether ‘you can build it’, but rather ‘will they come?’ In deep tech, however, because the innovations are far-reaching, you can be confident that if you succeed in creating significant improvements in areas like performance or reliability, you can be sure that ‘they will come’. The question, then, becomes, “Can you actually build it?”

Zvibel gave a powerful clarification and a valuable piece of advice for all deep tech entrepreneurs: “I think we see a lot of deep tech companies that don’t solve pain points that are painful enough.” He explained that deep tech firms sometimes become enamoured with solving a problem, only to discover—after investing in development—that the market doesn’t find it interesting enough.

In other words, while deep tech faces the unique challenge of “Can we build it?” the question of “Will they come?” is still equally essential.

Zvibel elaborated further: all professional enterprise buyers have made the mistake of buying exciting new technology from a company that ultimately fails, only to revert to reliable, established providers that they can count on in the long term. For startups, it’s crucial for them to understand that they represent a substantial risk for enterprise buyers, who may be putting their own reputations—or even jobs—on the line by backing an unknown over a trusted provider. If the problem you’re solving isn’t severe enough, it simply won’t be sufficient to offset the risk the enterprise is taking by choosing your startup over an established competitor. The risk has to be worth the potential gain. 

In my personal experience, the advantage of your solution over existing alternatives, especially compared to established players, needs to be obvious, believable, and at as a rule of thumb, least one order of magnitude improvement in the key measure. If you find yourself arguing over minor specification improvements, it’s likely you’ve already lost.

In WEKA’s case, they enabled their customers to reduce the time of a crucial process by around 99%, giving them a significant time-to-market advantage over their competitors in a highly competitive industry. The promise of 99% gain was worth the risk, and as WEKA matured, that risk became a bankable gain.

I’ve personally experienced this many times too. Years ago, as a young CEO of an instrumentation startup, I invested team time to build a business case comparing the established incumbent approach with our ‘risky’ startup’s offering. We were able to prove that for a critical phase of the drug development process, we were 140x faster and used 99% less (incredibly scarce) drug sample. From this, we enabled our customers to save months and significantly reduce the risk of their billion-dollar drug development projects. No nuanced arguments were needed. We proved that we and our €100,000 instrument were worth the risk!

Listen to the whole interview here. All credit to the amazing guys at The Product Market Fit Show.