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Here's What a Hackathon Can't Do for Your Startup

Hackathons promote a concept that rarely leads to sustainable businesses

This article originally appeared in Crain's Chicago Business on Nov. 10, 2015.

By Linda Darragh

Hackathons are thriving in Chicago, and more seem to pop up every day as programmers and entrepreneurs rush to meet and work together for a chance to win thousands of dollars in prize money.

While such competitions and events create opportunities to generate buzz and exposure for ideas, hackathons tend to promote the thinking that it's possible to create the new and different in 24 to 48 hours—a concept that rarely leads to sustainable businesses.

Disrupting a business category or potentially creating a new one takes time and patience. In my years of coaching students and other budding entrepreneurs, I've witnessed the real benefits of investing ample time to fully understand customers and their current or emerging “pain points.”

Consider the example of FourKites, a Chicago-based startup that provides technology tools to help manage the supply chain, transportation and logistics industries. Before ever bringing a product to market, the founders took the time to get to know their customers. After learning about new regulations requiring long-distance trucks to have computers onboard, FourKites set about to address the friction that new rule would create. It forged partnerships with data providers and came up with a product just as the industry needed it.

The process of creating those partnerships never could have happened in 48 hours or a week. That investment of time—including months of meetings and research—ultimately put the company on a faster track to success.

WHAT A HACKATHON CAN'T DO

In contrast, hackathon thinking pushes people into a race to line up an engineer and build something before they have a full understanding of consumers within a particular market or niche. Without that insight, entrepreneurs can only rely on their own “pain points” or what they assume are the big sources of friction for consumers.

Here are my top three suggestions for getting a leg up on what your consumers are thinking:

Understand past behaviors. Asking people what they might do won't yield the gritty details that uncover pain points. Instead, independent interviews need to focus on past behaviors. For example, if someone booked a trip within the past three months, what did they do? The objective is to listen for those moments when a consumer experienced frustration or disappointment. Where there's consumer pain, there is the potential for entrepreneurial gain.

Present your sketches to strangers. Whether it's on the Blue Line or in the Starbucks line, find a captive audience of friendly, random strangers who are willing to take a look at sketches of your product, service or app. (Sketches should be rough drawings of what the product would look like and do.) Don't explain—just watch this helpful stranger interact with your concept. You've got to be fearless to ambush strangers, but the payoff is invaluable independent market research.

Create a free mock website. Tracking where consumers point and click and whether they're willing to submit their email addresses to learn more will help you test drive messages, offerings and prices. And it can be done for little or no cost via a mock website. Just put one up and drive traffic using social media. Most important, these sites will help identify what won't work—before you've rushed out to hire a high-priced engineer.

Hackathons and pitch nights can be fun and entertaining as an exhilarating competition. And they do promise the opportunity to make connections and receive feedback (often, along with a free goodie bag). But this entrepreneurial equivalent of speed-dating cannot divert attention from the real process of getting to know the marketplace.

Having patience to develop the next big idea may sound old school and even counterproductive amid the latest hackathon frenzy. But there are no real shortcuts on the deep dive into understanding what consumers really want and need.

- Linda Darragh is a professor of entrepreneurial practice and executive director of the Kellogg Innovation and Entrepreneurship Initiative and the Levy Entrepreneurial Institute at the Kellogg School of Management at Northwestern University.

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