Guest column

Why you need to prevent 'expert syndrome' and find a market need for your startup to succeed

The biggest reason startups fail is because of no market need. Emilija Manevska/Getty Images

It's a brave new world. It's an era of hot IPO's, next-generation technological disruptions, Silicon Valley tech-storms, and many startups that eventually nosedive. Many startups believe that they are creating the next best thing, but in reality, more than 80 percent of the startups fail on a global scale.

These are staggering numbers as the world is evolving, and the job market is saturating exponentially, giving to the rise of startups and entrepreneurial ventures. Nowadays, it's easy to get caught up in the endless stories of startup successes, but in actuality, startup failures are way more common that startup successes in accord with data from CB Insights.

According to the surveys by CB Insights analysts and researchers, more than 70 percent of upstart tech companies fail, and their counterparts the 'consumer hardware startups' are prone to failure with 97 percent ultimately dying or becoming "zombies." Let's talk about why startups and businesses fail. One of the significant factors that cause startups to fail miserably is that there's no market need.

Preventing 'expert syndrome'

Startups can run into the problem of their being little or no market need for the product or service they are providing. Startup founders tend to overrate and overestimate themselves and underrate the more experienced people around them. This is known as 'expert syndrome,' and it is one of the contributing reasons why many startups tend to fail and nosedive.

Ignorant individuals are often bursting with escapism, unrealistic expectations and grandeur emotions, which may cause their businesses to fall out. The actual feeling that you are in control combined with an idealistic inevitability that there is market need for the creator's product or service can lead to inevitable failure.

Expert syndrome is recognized in the field of psychology as the Dunning-Kruger effect; cognitive bias of superiority in the mind of an individual that believes their knowledge is greater than it is. This can also result in unrealistic expectations for otherwise relatively small impact incremental innovations.

As an MBA, I have seen this in myself over the years (admittedly often in hindsight) and in waves of fresh MBAs trying to turn their class project business plan into a real business. However, it is not exclusive to MBAs as any domain experts' true knowledge could be limited by their perspective and experience of a given situation. On the contrary, the secondary issue of the nature of innovation is more complicated as it presents a cause and effect relationship with the market scenario.

For a startup's success, it is essential for the product or service to be more 'disruptive' in nature rather than being merely incremental. The startup needs to solve an unsolved problem rather than assisting the problem.

Lessons learned

Now, the million-dollar question is how to learn from 'No Market Need' as the leading startup reason for failure. My advice is to get out and speak early and often with those with a different perspective on the innovation, certainly outside of the area of the innovator. From my experience this is better done in waves in that the questions are asked to the relevant persons, first reaching out to those most proximate to but outside the invention and inception space. After that moving further out from the center to find reason, logic, and ideas for validation of the disruption that can support the startup momentously.

For example, the technology for Solenic Medical addresses infections on medical implants, which was invented by a pair of university researchers at UT Southwestern. The first is an expert in infectious diseases and the second is a thermal medicine engineer.

In my due diligence research, I first reached out to orthopedic surgeons who perform the implant surgeries and deal with the first challenges of infections that arise. Receiving great feedback, almost too good to be true at first pass, I moved on to a next wave of doctors a little further out. I spoke to an ER doctor, a neurosurgeon, an interventional radiologist, and so forth, which didn't result in the same level of enthusiasm but raised good questions that drove further investigation in the due diligence effort.

From there I moved on to contacts in surgical centers and medical billing experts, further removed from the problem and again less enthusiastic. Less enthusiastic for sure, but none of them raised significant barriers, and some helped refine our understanding of what it would take to get the product to market within facility budgets and medical reimbursement requirements.

The crux here was not in any way to disrespect or discredit the inventor of the invention, but to get a perspective that complements the inventor(s) and validate the technology in multiple dimensions: the customer perspective, the product enabled by the technology, team requirements, funding challenges, all leading to valuable insights on the value of the innovation itself.


Obviously in the case of Solenic Medical, we chose to license that technology and form a company around it because we became confident that there was significant market need worth the challenges of bringing the medical device to market. This is what 'Market Need' is all about. It's about finding the right need at the right time and in the right manner.

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James Y. Lancaster is the Texas branch manager for Arkansas-based VIC Technology Venture Development. Lancaster, who lives in College Station, oversees business there, in Dallas, and in Houston.

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Building Houston

 
 

Here's what Houston-based online programs are ranked as best in the country. Photo by Luis Alvarez/Getty Images

Rice University's online MBA program has something to brag about. According to a new report, the program has risen through the ranks of other online MBA curriculums.

MBA@Rice, the online program at the Jones Graduate School of Business at Rice, has ranked higher in four categories in the latest edition of U.S. News & World Report’s Best Online Programs. The report evaluated schools based on data specifically related to their distance education MBA programs, and U.S. News has a separate ranking for non-MBA graduate business degrees in areas such as finance, marketing and management. The MBA list focused on engagement, peer assessment, faculty credentials and training, student excellence, and services and technologies.

“We use the same professors to deliver the same rigorous, high-touch MBA in our online MBA as we do in all our campus-based programs,” said Rice Business Dean Peter Rodriguez. “The strong national rankings recognize our success in reaching highly talented working professionals who don’t live near enough to our campus or for whom an online program is the best option.”

Rice's virtual MBA program ranked No. 12 (tied) in the 2023 list, which was up several spots from its 2022 ranking, which was No. 20. Additionally, Rice stood out in these other three categories:

  • Best Online MBA Programs for Veterans: tied for No. 10 (No. 14 last year).
  • Best Online Business Analytics MBA Programs: tied for No. 10 (tied for No. 12 last year).
  • Best Online General Management MBA Programs: tied for No. 7 (tied for No. 11 last year).

Rice recently announced a hybrid MBA program that combines online instruction with in-person engagement. The first cohort is slated to start this summer.

The MBA@Rice program is the top-ranked Texas-based program on the virtual MBA list. Several other programs from the Lone Star State make the list of 366 schools, including:

  • University of Texas at Dallas at No. 17
  • Texas Tech University at No. 33
  • Baylor University, University of North Texas, and West Texas A&M University tied for No, 65

U.S News & World Report ranked other online programs. Here's how Houston schools placed on the other lists:

  • The University of Houston tied for No. 10 in Best Online Master's in Education Programs and tied for No. 75 in Best Online Master's in Business Programs
  • Rice University, in addition to its MBA ranking, tied for No. 27 on the Online Master’s in Computer Information Technology Programs ranking after being tied for No. 49 last year
  • University of Houston-Downtown ranked No. 26 in Best Online Master's in Criminal Justice Programs and tied for No. 55 in Best Online Bachelor's Programs

The full list of best online higher education programs ranked by U.S. News & World Report is available online.

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