Problem Definition – 9 Key Questions

According to the Startup Genome Report (March 2012), 74% of Internet startups fail due to premature scaling. Of these, 60% were focusing on validating the product during their initial lifecycle phase, whilst 80% of those startups that scaled successfully were focusing on discovering a problem. In other words, finding and defining a real problem is critical to startup success. The creation of value starts with the problem that is being solved: a problem dictates a need, and the fulfillment of that need is the value that is created for the customer. Successful startups succeed because they find a real and meaningful problem to solve for a (large enough) group of customers; whereas failed startups effectively execute the irrelevant.

When defining the problem, ask the following questions:

  • Is it addressing a real and valid pain point?
    The more specific and painful the problem, the more value will be delivered and ultimately the more the customer will demand and be prepared to pay for your solution.
  • How evident is it to the customer?
    The more obvious it is, the easier it will be to convince them that they need your solution. That’s not to say that breakthrough products shouldn’t look to address non-obvious problems, just that it will take more effort and resources to bring it into the customer’s consciousness.
  • Is it a problem that lots of people have?
    The more people that experience the problem, the larger your potential market.
  • Is this a discrete group that you can delimit and effectively target?
    To be able to market to the audience, especially through ‘traditional’ channels, you need to be able to define and delimit them so you can target.
  • Can you reach and serve these people?
    If you can’t access them, you can’t fulfill the value that you’re promising and you don’t have a business. Many of the breakthrough startups of recent times have innovated more around their channel to market, than in the product itself.
  • Are these people willing or likely to spend money to solve this problem?
    If they’re not, you don’t have a business that’s going to make money, so why bother? (Unless of course you’re operating a not for profit organization).
  • Is the problem likely to remain or even grow over time (on a universal level)?
    In which case the market will be sustainable over the longer-term.
  • Could someone else easily solve this problem; is it a defendable space?
    Innovation is transient; look for spaces that you can access quickly and build the longest window to gain a foothold before new competitors emerge.
  • Is it easy to articulate what the problem is and how you can solve it?
    The easier it is to communicate and understand, the quicker it will be to build awareness, demand and adoption.

Asking these questions will give you a better understanding of the problem that you’re looking to solve for, how this leads to delivering value for the customer, and the potential business that can be built from this base. Your problem doesn’t have to tick every box, but the more you do, the easier it will be to deliver value for the customer and realize your potential.

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