Fan Deng: Why Inventors Face Particular Risks as Founders

Inventors face particular risks as founders A student once asked Fan Deng: “We are a nanomaterials startup team. Our costs are so high that commercialization is extremely difficult. But we believe strongly in the field. Can you help us find a way forward?” Sensing the problem, Fan asked, “Are your founders a group of inventors who started the business together?” The student was surprised. “You saw it immediately. Our team consists of inventors, all with doctorates. We have worked on nanomaterials for more than a decade, but cannot find a breakthrough.” Fan replied cautiously: “Be careful. Inventors face substantial risks when starting businesses.” Why? Because they love their invention rather than the social problem they should solve. When difficulties arise, they do not ask for the best solution. They insist on taking their invention to every corner of the world, refusing to turn back even after hitting a wall. People say, “You will not give up until you reach the Yellow River.” Inventors often refuse to give up even after reaching it. I have seen many inventors start businesses, with very few good results. Many care only about their invention, not the social problem it actually solves. Here is a typical project I encountered: an automatic car-cover device. Its inventor found us through various channels, saying it had taken ten years to develop and asking for investment. Hearing “ten years,” I felt real respect. Few people now have the patience to work so carefully on a product. I asked, “Why did you invent this?” He replied, “I often see people covering cars at the roadside. It is awkward and sometimes takes two people, wasting time. My invention is simple: put it on the roof and press the remote. It covers the car automatically; press again and it retracts, ready to put in the trunk. It is easy to operate and carry.” “How much would you like us to invest?” I asked. Proudly, he answered, “Our team values the invention at 100 million. We can offer you a discount if you invest. What do you think?” I tend to be direct. “Thank you, but I am sorry: I do not believe in this invention and would not invest a cent. Cars parked outdoors should withstand wind, sun, and rain; they do not need covers. I also have an underground garage, so your device would have no use for me.” He objected: “Your situation is unusual; perhaps you do not need one. But our research found 31.72 million newly registered motor vehicles nationwide in 2018 and a total of 327 million. That is a huge potential market. If just one-tenth of Chinese owners cover their cars, we have over 30 million potential customers.” Does his logic sound reasonable? With 327 million vehicles in China, just one-tenth of the market would mean more than 30 million orders—a huge business that I should surely back early. Do not rush to that conclusion. Hear my view first. I told him: “There are several obvious problems. First, your assumption that one-tenth of owners cover their cars is simply an assumption; I doubt the number is that high. Second, many who do cover their cars do so only occasionally; it is not frequent behavior. Third, your device sits visibly on the roof and could easily be stolen. Fourth, when stored in the trunk, it adds weight and fuel consumption, making it poor value.” I gave detailed feedback and hoped he would identify the social problem he needed to solve. But however I explained it, he could not accept it. Why? His starting point was the invention, not a social problem. Once in love with it, he thought about it constantly, forgetting that an invention should effectively solve an existing problem rather than create new ones. Two names may come to mind when we discuss invention: Edison and Jobs. Thomas Edison did not invent the light bulb, but his team found an appropriate filament that produced beautiful, lasting light, enriching life after dark. Likewise, Steve Jobs did not invent the smartphone, but overturned established ideas about it—in his words, “redefined the phone.” Do you remember older smartphones? Nokia models had physical full keyboards, with every key on the handset. The keys were so small that many people filed their nails to a point to use them more easily—hardly ergonomic. When some users reported the problem to Nokia headquarters, the response was, “To have computer functions, you need a computer keyboard.” That almost became an industry rule, followed by Nokia, Motorola, and later BlackBerry. Jobs, however, never simply followed convention. He ordered his designers: “If you cannot solve everything with one button, this team will be disbanded on the spot.” He displayed his tyrannical side, smashing many prototypes and frequently shouting at designers, all to produce that round button. He succeeded, rewriting mobile-phone history. Allen Zhang once quoted Amazon founder Bezos: “Innovation is not based on reasoning; innovation serves people. Will you display cleverness at any cost, or choose kindness?” I strongly agree. When an invention merely showcases a founder's intelligence instead of addressing a social problem, the venture will fail in most cases. Consider the proliferation of “smart products.” Are they genuinely smart? Do they really improve everyday life? Or are they merely labeled technological innovations, only to be abandoned by the market? Every founder should consider these questions.