The Next Billion-Dollar Startup Will Address a Basic Human Need

How do you build the next billion-dollar company? Easy. Think of a basic human need and put it online.

“I had this stupidly simple observation that maybe everyone else under 30 has already had,“ says Steve Blank. “And the big observation is that we talk about social networking and we talk about Facebook and Twitter but we never talk about the big picture. And the big picture is that these billion-dollar companies are doing nothing more than mediating basic human needs and putting them online.”

Blank is a true startup veteran. He’s the author of “Four Steps to the Epiphany” and “The Startup Owner’s Manual.” He’s been around Silicon Valley since it was mostly fruit orchards and has founded or worked with eight tech startups, four of which went public. He now teaches entrepreneurship at Berkeley, Stanford and Columbia. (He’s also been known to write for ReadWriteWeb, and we’ve quoted him before.) So even when he calls an idea simple, it’s worth paying attention to.

The Big Fundamental

If you’re creating a startup and you want it to go big, the first test to apply is: Does it address a fundamental human need? “Ask yourself, does this feel like something I would have done, or maybe better than I would have done, face-to-face or without a computer? Is it a basic human thing? That’s the filter. It can’t tell you how to write the next Twitter. But it is a very valuable test after you’ve come up with the idea and built the prototype.”

Think about it. Everything we used to do without computers, from chatting to sex to entertainment – things that people are hardwired to do – we used to do without computers. The very successful startups of past years have taken those human needs and made them easier to do with computers. And the hugely successful startups have gone a step further. They’ve identified human problems and turned them into needs.

“That’s how Apple approached the iPod and iPhone,” Blank says. “Jobs turned a problem – how to communicate and be entertained portably – into a need. Ask Nokia and RIM what the [heck] happened. They built the world’s best communication devices, but Jobs turned it into a need. That’s an experiment that every entrepreneur should run: What do you do yourself that is not yet done online? I think this idea of mediating basic human needs started even before the Internet. I think video games were the first example of this. And then porn.”

“But,” you say, “all of the good needs are taken.” Perhaps so. But there are ways to do Twitter or Facebook better. You just have to invent them. Or do what Jobs did – identify a problem and turn it into a need.

Is Accounts Payable a Basic Human Need?

Consider, for example, accounts payable. “If you’re a really great visionary, is there a way to turn accounts payable into a basic human need?” Blank asks. “Don’t laugh. Great visionaries have turned products and problems into basic human needs.”

It all starts with a stupidly simple question. “Can you predict that next billion-dollar idea with certainty? Maybe not,” Blank says. “But you can at least ask the question.”