Solving a problem

Young entrepreneurs often tend to imagine how great their product or service will be on the market and even bring change to people’s behavior. Often, they even fail to bring their product on the market. Many times, the problem begins with the same: The “problem” that the business tries solving.

Advice #1: Don’t come up with a problem to solve

Being an entrepreneur and building your own startup are some fashionable buzzwords that people nowadays like to overuse. It’s the reason why other people may smile when you tell them that you are starting your own business. However, it’s the same people that follow Elon Musk or Bill Gates on Instagram or Facebook. It’s because being a successful entrepreneur is an inner dream that some people may have but never follow. By having been involved in the startup scene for more than 6 years by now, I had the one or another conversation with my friends or family around starting a business and solving an existing problem.

So many times, I heard them saying “I also had a few ideas” or “I had an idea in my mind that would be really cool to have”. Obviously, still being employed, they have never pursued them. In my last blog, I have talked about the hurdles and challenges of becoming an entrepreneur and forming your team. In light of this blog’s topic, especially the latter one often triggers me to ask a few questions, on which end it becomes clear that their ideas wouldn’t have real chances for survival. But why is that?

It often starts with the issue, of how people come up with ideas. Actually, it’s the issue of how they come up with the underlying problems. Clearly, there doesn’t exist this one secret recipe for your business starting point, but there are some ways to bring yourself closer to solving a real problem in the end. Apart from some exceptions, it’s about recognizing a problem rather than coming up with an idea.

Different approaches may lead to recognizing real market problems. The concept of “bricolage” tells us to use our resources at hand when starting a business. Some have strengths in their social resources, e.g. a great network, other in financial ones, e.g. investors. However, everyone has own human resources. May it be your personal perception of your environment, your experiences or the acquired skills in one or many business sectors. All of the above can be used to recognize a market problem.

The success of businesses often lay in their simplicity. Sometimes that simplicity already starts with the problem. It is not uncommon that entrepreneurs have realized a problem or inefficiency in their daily life that bothers them. To get rid of the problem, they come up with a product to solve the same. The same approach accounts for your personal experiences or skills in one business sector. Those problems may be more targeted at a specific customer group but can bring even greater financial results if the need is big.

Advice #2: Define the underlying core of the problem

After having realized an existing problem in the market, it is necessary to understand the underlying structure of the problem. It is not always possible to observe the core problem directly, as some problems derive from a deeper level. For example, when Joe Gebbia and his co-founders of Airbnb realized the need for more and cheaper sleeping possibilities, they knew that this was just one side of the medal. To solve this existing problem with a new approach, they first had to solve an even bigger issue: the fear of letting strangers into your house. Considering the worldwide 650.000 hosts, Airbnb has done a great job of defining and solving this underlying issue.

However, the identification of the core problem is one thing, whereas its clear definition is another thing. A focused problem definition is crucial for a good product-market-fit and thereby the success of your business. Throughout my participation at the Founder Institute pre-seed accelerator, I have stumbled over several business ideas as I couldn’t grasp the problem they are solving. The reason was not, that there didn’t exist a problem… it was rather about nailing it down. In situations like those, founders tend to overplay their insecurity by presenting you with more and more levels of their solution – a counterproductive approach.

One good exercise is to present the underlying business problem you are solving in just 3 words. This helps to put the focus on what exactly to solve with your product and service. Once you have defined and narrowed down your problem, it’s time for validating it.

Advice #3: Don’t fear rejection, aim for it

Validating your business problem might be one of the toughest tasks for founders, especially first- or second-time founders. Still, it is one of the most important ones. Pursuing a startup costs lots of time, money and commitment. Obviously, you want all of that to be well spent. Now, problem validation is worth even more, when the problem to be solved is not a real problem. Because then you have saved all that time and money to be better invested in something else. Unfortunately, many founders fear this step as they fear the rejection of what they have come up with. On top, they fear other people to copy their idea. A typical German thought.

Throughout my entrepreneurship master studies at Maastricht University, I came across the principle of “fast failure”. It tells you that you should aim to fail as fast as possible in order to use this learning and improve. Even though this might feel wrong, it’s exactly what entrepreneurship is about: go out, test, learn, improve. As earlier you start with it as better are your chances to succeed.

You can validate your defined business problem in several ways. One option is to look at existing market data. For quantification of the problem, websites like Statista or NumberOf.net are very helpful tools. For qualitative research, you may use sector-specific magazines or news articles. Another option is to validate the data yourself by interviewing people, having focus groups or solely distributing surveys. This allows you to gain even more specific and qualitative data. However, to receive valuable data it is important that the validation group is representative of your target group. Otherwise, you end up with biased results.

Conclusion: Recognize, define, validate, repeat

For the lifespan of your business, you should always remember, why you started your business in the first place. It was your underlying purpose to start it in the first place and also the reason why customers have engaged with you. However, this should never prevent you from questioning the status quo of your business. It’s a necessity that you always validate whatever you are doing and repeat this process whenever it’s needed. Even the most successful businesses have pivoted their business model several times. Nevertheless, keep in mind what problem you are solving for which target group.

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