(Breadline in Petrograd in early 1917. Credit: Wikimedia Commons)
During the cold war, a photograph shown in the West that highlighted the problems of centrally managed economies was that of people standing in line for a ration of bread. Standing in line for bread isn't a "natural" occurance but a consequence of other, more foundational decisions. When entrepreneurs are looking for human needs to meet, too often I see them taking the current circumstances as a given rather than exploring what created the dysfunctions in the first place.
For example, an entrepreneur might discover that people don't enjoy waiting in the line or that the current way the line is managed is less efficient than it could be. So he or she builds a company to provide entertainment to those waiting in line or builds software to reduce waiting times through better line management. But both of these miss the more important opportunity of why there is such artificial scarcity that bread must be rationed there while there are other places where bread is abundant.
The shorthand for this is "Optimizing Breadlines".
Optimizing Breadlines is software to help find taxis. Rethinking the foundation is Uber.
Optimizing Breadlines is software to help companies manage health insurance. Rethinking the foundation is helping individuals and doctors work outside the centrally managed health insurance system.
Optimizing Breadlines is recreating Wall Street using DeFi. Rethinking the foundation is using DeFi to change how people fundamentally think about money and investing.
So how do you know if you are optimizing breadlines? The test is how much you know about why the current circumstances exist. It actually requires quite a bit more knowledge and understanding of how humans act and why human systems of interaction develop. The best way to start is to keep asking "why?" through as many layers of assumptions as you can. And that will lead you inexorably to the foundations of human knowledge in the social sciences, the most robust and useful being the praxeological approach developed by Ludwig Von Mises and the Austrian School of Economics (see more here: https://mises.org/ and https://econ4business.com/).
Optimizing breadlines can be profitable in the short term. But meeting real human needs on a broad scale requires rethinking the foundations of the particular circumstances.