4 questions to define the problem your business solves

Many years ago, on a beautiful sunny afternoon, my wife was lounging on our patio quietly working her way through the crossword in the newspaper. The lovely lady who worked for us at the time looked over her shoulder and asked her what she was doing. “Just solving this little grid of problems” my wife replied. Anna then asked the killer question “Aren’t there enough problems in the world for you to solve?"

Start a business to solve a problem

I always think of this little memory when considering Number 1 in my list of tough questions that you must answer if you are starting your own business -  “What problem does your business solve?” Wherever you are and whatever your expertise and experience, there is no shortage of problems to solve. The challenge for any entrepreneur is how to find and choose a problem that provides the foundation for a great business.

Problem is a very wide playing field

You first need to understand that problem in this context has the widest possible definition. 

Problems can include:

• Scratching an itch, solving irritations, minor doubts and so on;
• Meeting an urge or desire often connected with fan behaviour in entertainment, sports or other fields;
• Expanding the ability to address a basic human need - more food, more communication, more answers;
• Delivering real measurable value by reducing costs, eliminating waste or similar goals;
• Tackling big hairy ambitious needs like poverty, health, hunger and deprivation.

Choices, choices, choices

Once you think like this, the list of problems becomes endless. How to start your own business? becomes How do you choose the right problem for your business to tackle? The best way to structure your thinking is to answer another bunch of hard questions (sorry!):

• Why do you want to solve the problem? Actually this should not be difficult. Why is about finding your motivating passion. Founding a start up is a tough life. A passionate belief in what you are doing is essential to ride the roller coaster.
• Do you know who has the problem or could you find out? Basically if you can’t figure out a way to identify your market you will struggle when the time comes to reach out to that market.
• How will you solve the problem? Sounds a bit obvious but also rather important. You need to be able to come up with a solution otherwise your business will have nothing to sell.
• Is there a business model? This may be the hardest question to answer. Just because there is a problem does not mean there is a market for a solution. 

Be careful - a problem does not guarantee a market

Assuming a market exists just because you have found a problem is one of the most common mistakes I see with start ups. Even very big problems may not lead to a clear and addressable market. To start your own business your solution needs to be simple enough and cheap enough to persuade people to solve a problem they have lived with all their lives.

B2B companies often define their market by the measurable benefits their product delivers. The logic is undeniable but unfortunately logic and buying decisions have only a tenuous relationship. Many solutions which guarantee reduced costs or faster time to market or similar never find a market because the business owner has assumed people will buy on the basis of clear benefits. Well defined benefits are great to have but they are not enough to guarantee success.

“In preparing for battle I have always found that plans are useless but planning is indispensable."
Dwight D Eisenhower

The right place to start

Thinking through the tough questions will benefit your business whether you produce a formally documented business plan or not. Defining the problem your business will solve is the right place to start a business. Answering this question will involve thinking about other areas such as the addressable market and the business model. That’s fine. Planning is an iterative and integrated process. If you are planning or growing a start up business, focus on the right questions and find the best tools, advice and ideas to help you answer them.