The best founders chase real problems

Every decade has its obsession. There was e-commerce. Then fintech. Then crypto.

Today, it's AI.

If you walked into a startup event today, you would be forgiven for believing that every meaningful business opportunity begins with artificial intelligence. Replace "AI" with "blockchain" five years ago, or "Web3" three years ago, and the conversations would sound remarkably similar.

Whenever capital starts flowing into a new sector, founders naturally follow. Investors become excited, valuations rise, and suddenly every pitch deck begins with the same sentence: "The market is changing because of..."

At Malpani Ventures, we've learnt to look beyond the technology.

Instead, we ask a much simpler question:

What problem exists even if this technology didn't?

The distinction may appear subtle, but it changes everything. Founders who start with technology usually spend their time looking for places to apply it.

Founders who start with a problem spend their time understanding customers.

One approach creates demonstrations.

The other creates businesses.

One insight we have gathered is that Founder-Market Fit is best defined as a founder's deep understanding of an industry, its customers and the problem they are solving. Companies built simply because capital is flowing into a sector often struggle to survive once the excitement fades.

The founders we enjoy backing rarely stumble upon opportunities by reading industry reports. More often, they've spent years living the problem. They've worked in factories and experienced supply chain bottlenecks firsthand.

They've sold software to banks and understand why lending decisions still take days. They've managed hospital operations and know exactly where administrative inefficiencies slow patient care.

Because they've lived the problem, they ask better questions.

Instead of asking, "How can AI automate this?", they ask, "Why does this process take five days in the first place?"

The technology is simply the tool. The customer problem is the business.

Take Perfios.

Long before fintech became one of India's hottest investment themes, banks faced a fundamental problem. Financial statements arrived in different formats, income verification was slow, and loan underwriting depended heavily on manual processes. The problem wasn't glamorous, but it was expensive.

Perfios succeeded because it dramatically reduced the time and effort required for lenders to analyse financial data. The technology evolved over time. The customer problem remained the same.

Similarly, Locus entered one of the world's largest industries - logistics. They could have attempted to build software for every part of the supply chain. Instead, they began with a far narrower question: how can enterprises optimise routes and dispatch vehicles more efficiently?

That focus mattered because customers weren't buying route optimisation software. They were buying lower fuel costs, better fleet utilisation and faster deliveries.

The software happened to be the mechanism that delivered those outcomes. We've observed the same pattern outside software.

Consider India's speciality chemical manufacturers. Many of the country's most successful companies didn't emerge because a new manufacturing technology suddenly appeared. They spent years mastering complex chemistries, developing relationships with global customers and building manufacturing processes that competitors struggled to replicate. Their competitive advantage wasn't trend-driven- it was the result of deep domain expertise and relentless execution.

The same applies to companies like Polycab. Wires and cables are hardly the most exciting category for venture capital. There was no breakthrough technology that suddenly made electrical cables fashionable. Yet Polycab built a market-leading business by solving practical problems for distributors, electricians and contractors—consistent product quality, reliable availability and a trusted distribution network. Those are not trends. They are enduring customer needs.

One of the dangers of chasing trends is that founders often mistake investor excitement for customer demand.

The two are rarely the same. Customers don't wake up wanting artificial intelligence.

Manufacturers want fewer machine failures.

Retailers want inventory accuracy.

Hospitals want faster patient turnaround.

Banks want lower default rates.

Technology matters only when it delivers these outcomes more effectively than existing alternatives.

Another insight is that buyers don't care about the technology itself - they care about the impact it creates. Customers don't buy a drill because they want a drill; they buy it because they want a hole in the wall. More accurately, they want to hang their family picture on that wall.

That idea extends to almost every business we evaluate. Founders often spend months perfecting product architecture, AI models or engineering sophistication. Customers rarely evaluate businesses that way.

They ask much simpler questions.

Will this save me money?

Will this help me make more money?

Will this reduce risk?

Will this save my team time?

If the answer is yes, customers will forgive an imperfect product.

If the answer is no, even the best technology struggles to find a market.

This is also why we believe domain expertise compounds.

Founders who have spent years understanding an industry notice problems that outsiders simply don't see. They know which inefficiencies customers have accepted as inevitable. They understand buying behaviour, procurement cycles, regulatory constraints and operational realities.

These insights cannot be downloaded from a market report. They are earned. History suggests that the winners will not necessarily be those who adopt new technologies first. They will be the founders who combine those technologies with a deep understanding of customer problems that have existed for years.

At Malpani Ventures, we don't invest because an industry is fashionable.

We invest because a founder understands a problem better than almost anyone else. Businesses built around solving enduring problems have a habit of enduring themselves.