solving the right problem

I sat in a keke the other day and observed a scenario.
A woman wanted to enter the last seat, and she asked the price to her destination.
"700 naira", the driver said.
The woman was vehemently arguing about the price and the fact that it was quite expensive for the relatively short journey.
Turns out the driver was intentionally hiking the price up.
The woman could’ve left... but guess what? She still paid the price!

Let’s call this said woman “Ada” (I never got to ask her name)

During the ride, I decided to look for factors that actually made Ada agree to pay even though it wasn't actually far and… I found some very interesting facts.

1) there was traffic already and it was building up quite rapidly.
2) the woman was definitely rushing to go somewhere
And 3?
There were no other kekes available.

This was quite fascinating to me, especially when I compared it to the startup world.

A user would ALWAYS pay if you can solve a problem for them (getting to Cele in this case), in a way that no other person can provide.
That keke was the one going to Cele at that time even though it was expensive, it was the only efficient option.

Ada didn't try to enter a keke that was just arriving because it'll take a while to fill up and time was a luxury for her. She also didn't even try to wait for another one to come. In that instance, all she wanted was to get to Cele as soon as possible.
And even though the keke driver charged above the rate, she didn’t care.

The more painful, urgent, and underserved a problem is, the more pricing power you gain. The building traffic made every passing minute more costly, which only made her decision easier.

The companies making bank every month have found a way to provide value to a subset of people who really really need their solution to solve a problem they face.

This subset of people would continue to pay consistently month-over-month, year-over-year for your solution as far as you keep solving their problem in the best way possible and at a price they can afford.

And a good way to get to this state in the startup world would be to define a type of person you want to build for (AKA a target market), have a hypothesis of the problem they face, and constantly talk to them for proper validation (a good book on this is The Mom Test).

I noticed this while in a keke in Lagos, Nigeria and it really illustrated what solving a core problem and charging for it would actually mean in the business world. (also see vitamins vs painkillers)

I think the road to success is to constantly look for the “Adas” of a sector and charge them for value. I’m on to find my next “Ada” and I hope you are too. Bye!