Building software has never been easier. With AI Code Builder, Low Code Platform, and pre-trained models, you can launch your app in a few months, unlike a few years ago. One site that tracks AI tools lists over 30,000 of them. According to research firm Gartner, “70% of new applications developed by an organization will use low-code or no-code technology by the end of this year.”
However, this accessibility has its drawbacks. The locks are open, and many founders rarely separate them, building almost identical tools. There’s no shortage of AI writing tools, AI chatbots, and all of AI. result? A crowded market filled with counterfeit goods.
Riding the waves is fascinating. Whether it’s generative AI, agent AI, or something else, it jumps to the next hot space. It can get attention quickly. But that rarely follows. Too many founders start with technology and look for problems that justify it, and justify it rather than solving what people actually care about.
When technology comes before problems
Certainly, AI has real value, but only if applied for purposes. We are in an age where many founders are now adding AI wrappers on top of LLM like ChatGpt and branding themselves as an AI company. But wrapping GPT-4 with a new UI is not business. This is a short-term gimmick that is easy to copy. All you are offering is “GPT-4” [insert niche]”You’re not building a moat – you’re building a magnet for clones.
The AI boom has made this painfully clear. The startup was in a hurry to package large-scale language models for every use case imaginable. But as one blunt summary put it, “Most AI startups are doomed because they lack defensive potential and differentiation.”
This is not a new pattern. Remember the chatbot trend? In 2016, bots were pitched as the future for everything. Facebook jumped in. So did dozens of startups. However, the technology was not ready. The bot failed on a basic task. Facebook’s own system could not handle 70% of user queries without human backups. The hype collapsed, and many of those startups disappeared as quickly as they arrived.
Or take a Color Lab. In 2011, they raised $41 million before launch to build a location-based photo sharing app. Behind it was a big name. However, the app itself confused users and lacked a clear use case. It folded within two years after a pivot failure to the video and a simple marketing push.
Juicero is another classic. A $400 internet connectivity juicer with custom parts and high-end engineering. problem? No machine was needed. You can squeeze the juice pack by hand. Juicero raised over $120 million before becoming the Silicon Valley punch line. No one needed it.
And then there is Watson of IBM for oncology. Supported by the company’s AI Glory Days, Watson has promised smarter cancer care. But in reality, it was clunky and sometimes dangerous recommendations. It didn’t fit how the doctor actually worked. After years of set-up and important reports, IBM pulled the plug in 2023.
These are more than just anecdotes. They are warnings. When startups chase headlines rather than customer needs, they build something good looking on pitch decks, but collapse in the real world.
When AI hype is at risk
A trend-following mentality can be reckless, not merely inefficient. ClearView AI has created a facial recognition system by scraping billions of images from social media. For a while, it looked like a promising law enforcement tool. But it didn’t ask for permission. It ignored ethics and regulations. When the story broke, the fallout was immediate. Litigation, prohibition, and the collapse of its core business.
Just because technology allows you to do something doesn’t mean you should.
Trend Trap: Why chasing hype leads to failure
Following trends may feel like a shortcut to success, but it’s a trap. Startups that can’t solve real customer problems often crash violently, no matter how much money they raise, regardless of how trendy the pitch is. History has many examples.
Take Shyp. It raised over $60 million in an attempt to become an “Uber for delivery.” However, there was not enough broken for most people to pay the premium. Beepi raised $149 million to reform the purchase of used cars, but failed to gain customer trust and burned at $7 million a month. Sprig tried to disrupt food delivery with $850,000 burns per month, but the model was too complicated to shrink. Juicero spent $118 million building a Wi-Fi juicer that no one actually needs. A Bloomberg video shows people can squeeze juice packs by hand.
Different names, same result: big budget, big promise, real problems never solved.
This takes a closer look at some of the most famous flops.
Shyp: We raised $62.1 million to mimic the Uber playbook. Transport logistics failed because it was not painful enough to justify the price.
Beepi: Burning $149 million in fuel, chasing on-demand car purchases. Customers didn’t need flashy apps. They needed trust and value.
Juicero: In 2013, it launched a $699 Wi-Fi juicer, raising $118.5 million. Nothing was resolved. The hands worked the same way.
SPRIG: We spent $850,000 a month trying to deliver meals on demand. The model was too complicated and economically unsustainable.
Yik Yak: We raised $73.5 million through anonymous chat, but usage collapsed by 76% (2015–2016) as Snapchat met social needs more effectively.
Doppler Labs: raised $51.1 million for smart ear devices and sold only 25k units. The AirPods quickly surpassed that in both their functionality and appeal.
These startups had one thing in common. Instead of solving real customer issues, we followed the trends. And in the end, they couldn’t save them from it.
Why trend tracking fails
Some common consequences when founders lead in buzz:
Weak product market fit
There is no permanent differentiation
Ethical or legal blows
I burned cash with very little display
Curious users who are not sticking
Startups Doing Differently
Basecamp is still available 20 years from now. There is no VC funding. There are no trendy pivots. A consistent focus is on helping your team communicate better. Jason Fried and David Heinemeyer Hansson first built it and then shaped real user feedback over time.
Slack comes from a failed game startup. The team created internal speaking tools and found it more useful than the game itself. They didn’t chase the funds because “Enterprise Chat” was hot. They really built what they needed, and it turns out that millions of others need it too.
Zoom did not invent video calls. It just made them better. Eric Ewan was looking at the problems while working at WebEx. He didn’t want to reinvent the meeting. He wanted to fix what was causing them to get frustrated. Its laser, focused on the user experience, helped Zoom grow long before Covid made it famous.
MailChimp started as an email tool for small and medium-sized businesses. It’s not sexy. But it worked. It grew quietly and remained bootstrap, and became an essential item for millions of marketers.
Even AI, some startups continue to concentrate. Runway ML spent time with real video editors and learned which tasks were slow and expensive. They then used AI to speed them up. Humanity has taken a long vision and spent years shaping large language models at user’s intent, rather than jumping from one trend to the next.
The power to solve real problems: how the Giants did it right
Big names such as Amazon, Netflix, Apple, LEGO, and more have all been expanded by solving clear, real-world problems. Amazon has made shopping easier. Netflix has made entertainment more accessible. Apple has made technology intuitive. LEGO helped children become creative again.
It’s not rocket science. This is a consistent focus on usefulness.
Look at companies that have now built their empires by tackling real customer problems with lasting solutions (the successful companies that reinvented their businesses).
Amazon: It was released as an online bookstore in 1995, solving convenient shopping problems. Innovations such as MarketPlace (2000), AWS (2006) and Kindle rose to $4609.8 billion in the fourth quarter of 2022.
Netflix: Starting with DVD rentals in 1998, we moved to streaming in 2007, making entertainment more accessible. By 2022 it was worth more than $210 billion, surpassing cable television (Nielsen, 2022).
Apple: Solved problems with seamless and elegant technology from early 1976 computers to iPhones. Net profit for 2023 was close to $97 billion.
LEGO: After nearly going bankrupt, he refocused on creative play with core bricks and franchises to solve his imaginative engagement needs. Today it is the third largest toy manufacturer sold in over 130 countries.
Slack: Born from the 2012 failure (Glitch), it was released in 2013 to resolve workplace communication frustration. By 2023 there were 20 million active users every day.
These giants did not follow the fleeting trend. They identified and resolved actual customer problems, creating value that continues.
The winner’s common points
Finally, we tend to share some important features:
They know their customers well
They don’t follow the trend just because it’s a trend
They keep things simple and convenient
They focus on loyalty and true satisfaction to short-term hype
How to solve real customer problems: Founder’s Guide
Want to build a business that continues? These steps will focus on solving real customer problems (Main reasons why startups failed in 2022, Startup Quotes from Successful Founders):
Understanding customer pain: 58% of failed founders skipped deep market research. Please consult with the actual user. What makes them irritated? What is the problem keeping them at night?
Provides unique fixes: Apple not only made technology, but made it intuitive and elegant. Don’t build something just because you can. Build something that solves problems in a way that really stands out.
Continuously built: Sprig’s $850,000 monthly burn was a death sentence. Hype can attract attention, but retention and efficiency keep you alive. Build what people want to continue using.
Listen to your obsession: Bill Gates said, “Your unhappy client is your biggest source of learning.” Make feedback your second brain. Keep talking to users. I will continue to improve.
To purpose: Netflix was trendy so I didn’t pivot to streaming. It was done because the customer requested it. As Paul Graham said, “Whatever is best for your users.” Shape your direction with their needs.
Don’t force technology: If you want to actually improve your experience, use technology that is right for your job. Fantastic tools don’t make great products. It will not solve the real problem.
Ignore FOMO: Just because everyone else is following the trend doesn’t mean that it’s the right move for you. The trends disappear. A product that maintains power solves problems that no one else has solved.
Building loyalty before the buzz: If people love your product, they will tell others. Otherwise, the amount of marketing, press, or funds will not correct it. They are obsessed with providing value, not just headlines.
These are not just tips, they are roadmap for solving important problems in busy markets.
Play a long game: Why solve problems and why win every time
The AI and SaaS boom (today $317 billion) is projected to reach $775544 billion by 2031. Founders tempt them to follow trends such as generator AI and blockchain. However, Juicero and Shyp crashed with hype, and Amazon and Netflix thrived by solving real problems. Warren Buffett said, “Prices are what you pay, value is what you get” (a startup quote from a successful founder). Solve real customer problems through deep understanding, sustainable models and merciless focus.
Drew Houston of Dropbox said, “Don’t worry about failure, you only need to get it right once” (an inspirational startup quote). Solve the real problem and get it right. It’s the key to not only survival but also thriving.
The tech industry runs fast, but the actual business takes time. Winning startups aren’t going to chase all new acronyms. They are people who find real problems and continue to work on them. Hype. Value stick. AI is new electricity. Stop branding your startup as an AI company and start creating real value.
So before starting the next AI-driven model, [fill in the blank]ask yourself: am I solving things that people really care about? If the answer is yes, continue. If not, don’t expect the buzz to carry you very far.
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