A lot of entrepreneurs/founders are really good at identifying a problem in a system. Many entrepreneurs are able to take another step. They are able to identify and create a solution--so that's even better.
Here's the sequence that these entrepreneurs go through:
1. They identify the problem that the energy tech industry has
2. They identify a potential solution
3. They create the solution
Simple enough, right?
While that's all well and good, but it's not good enough if you want to be a successful founder.
There are still some steps that are missing. Yes, actually there are tons of steps missing in there, but there's an extremely important step that a lot of entrepreneurs/founders don't consider that I want to discuss today. Here's what that sequence should actually look like:
1. Identify the problem that an energy company has
2. Identify a potential solution
--> 3. Figure out who is going to pay for the solution
4. Create the solution
You have to take this extra third step if you want to create a company that you will grow. You have to figure who is going to pay for the solution. People forget about this part. If no one will pay for the solution, then it's not the best solution. The answer is NOT founders, by the way. If someone pays for the solution, in some ways that is how your operations get validated. So it's pretty important. Ask yourself if your solution is something that customers will pay for it--either directly or indirectly.
Here in Houston, Texas and Dallas, Texas this is what investors want to know. They want to see if founders can answer this question.
Don't think that the solution will simply be paid for by oil and gas investors. That's not how this works. The investors themselves are wondering who will pay for the solution. As a startup lawyer I see this question being asked of founders all of the time. "Is the solution something that customers will eventually pay for?"
The sad reality is that if there's not someone who is going to pay for the solution, then the company just won't be fruitful even if everything else the company is doing is pretty badass. The customers/clients won't be there; the investors won't be there; there will be a lot of important parts missing.
So don't forget this important step.