Last year I interviewed Colin Keogh, an Irish entrepreneur and previous Forbes 30 Under 30 about his work on the Open Source Ventilator, a solution to the crisis for ventilator and equipment shortages in hospitals globally in response to the then emerging Covid-19 pandemic. In the interview, he stated entrepreneurship was all about solving real problems. Note that I bolded the word “real”. While you may have identified a problem or need, is this a problem that your target market or customer even wants solved?
Here, I’ll be drawing from my own experience mentoring Start-ups and working in various industries, to provide a high level view on the steps you can take on how to identify “What’s Your Problem?” or in the context of a potential customer “Their Problem” and from that generate a solution to fit.
Step 1: Identify the problem you want to solve
This goes without saying, when setting up a new business or even bringing in a new product, service or offering to an existing business, it’s important to understand the problem this solves in the market/industry you are targeting. This seems a bit obvious, right? Well, I’ve often come across budding entrepreneurs and passionate people who are searching for the “right idea” whereas they need to be searching for the “right problem” that they want to solve.
Step 2: Who does the problem impact and how?
Once you’ve identified a problem that you want to solve or in other words, the gap in the market, it’s important to understand the actual people that face this problem.
Who are the people that face your identified problem and need it solved and how are they currently tackling this problem at the moment. Essentially who are your customers, what’s the issues they face and what do they do presently to overcome that. Core to understanding the problem is understanding how your target market currently deals with it and if they actually need/want another solution.
Side Note: Quite often, I come across entrepreneurs or Start-up pitches where the articulated problem, solution and benefit are tailored towards a particular end user but this end user is not the paying customer or generator of revenue. It’s important to understand the problems faced by those who will be an organisation’s main source of income, as this will help position and design your solution to meet their needs.
Step 3: Is the problem you identified the actual problem you should be solving?
I’ve mentored and judged numerous hackathons and one thing I always look for are teams that went out and validated the need for their solutions within their target market, so basically who went out and talked to people and ask questions.
Just because you have identified a problem and a target market doesn’t mean there is an appetite to pay for a solution for this problem. There may be other gaps or problems you have not identified that there is an active need for a solution. The way to uncover this is to engage with your target market and do some “detective work” on the problems they face. While surveys are a fantastic way to get rich data and insights from an industry (taking into consideration that the questions are carefully curated and you have access to a tailored and engaged database), for the purpose of this blog I’m focusing on the face-to-face (in person or virtual) meetings.
Going out and validating your problem via face-to-face meetings and interactions can lead to a number of benefits;
- You broaden your network in the industry you are targeting.
- You learn what the actual problems are that your target market wants solutions for.
- You get a deeper understanding of what your target market actually wants the solution to their problem to be.
- You potentially find leads or first customers for your solution (product / service).
- You save time and resources that would have previously been committed to creating a solution for a problem nobody really wanted solved in the first place.
It’s important to note that for you to get the richest information possible, the conversations should be on what problems they are currently facing, rather than you trying to validate if your identified problem is correct. Yes, you want to know this also, but if you focus on that only and not on the bigger picture and what other problems or gaps exist, you could end up bypassing a more lucrative problem that your target market needs a solution to. By engaging with this you can learn what the problems are that your target market is willing to pay to have solved which can help you decide how to allocate your resources (time, money, human capital). While you may enter this process wanting to design a solution or business to solve “Problem A“, you may instead learn that the target market will pay for a solution to “Problem B” instead.
Step 4: What does your target market think the solution Is?
Let’s assume you followed Step 1 to 3, you’ve found the problem you want to solve, have validated this problem with those in the industry who are willing to pay for a solution. Now what is the solution they want? When talking with them, try and understand what the solution is they want, gather your research and make a Beta (test) version of this solution and then go back to those you spoke with and get them to test the solution and provide feedback to this. Include those facing the problem in the development of the solution. You’ll get feedback which will help with the making of the final solution and you’ll have engaged leads who know you, your company and solution and will be more likely to buy.
Having held various management roles, I’ve been asked to test SaaS products (usually recruitment management tools) and give feedback on areas such as usability, what features I valued, what I would like to see more/less of and overall if the current solution would be of value to me as a manager during the recruitment process. In those situations, I, the manager, was providing feedback to the Start-up, a recruitment software company, on their solution while it was in development. If this product is being tested by a number of managers, the Star-up gets a wealth of information on how to better improve their software that solves problems faced by managers in recruiting suitable team members.
It also provides insight into if their solution actually solves the problem in the eyes of their target market. If the target market perceives that the problem isn’t being solved, then the team would have to pivot / adapt their product to change that perception. It’s better to know this relatively early during the development of the solution rather than post product launch.
Step 5: Who else is solving the problem?
While this is Step 5, it can easily be put in as Step 2, 3 or 4 and should be an ongoing activity. Another name for Step 5 could be “Keep an Eye on the Competition” There is a chance that there are others trying to solve the same problem, but in a different way, or potentially in the exact same way you are. Research what they’re doing, what they do well, what they do badly and how you can carve out your own slice of the market. Learn from the successes and mistakes of these other companies, some may be based in another country, some may be tackling a similar problem in a different industry. By digging into what others are doing, you can glean insights into business models, revenue generation, product position and you can identify the slice of the market you can best position yourself to take.
Alternatively, if nobody is solving the problem, is there a reason why and should this be a red flag that there maybe is no appetite for this identified problem to be solved?
So, here I’ve scratched the surface of diving into the identifying and validation of market problems, but also how these can be solved with the input of your target customers and clients. So, to get stuck in to finding what your problem is, get a pen or crack open a new doc on your device and start to answer the following questions and go from there;
- Identify the problem your business wants to solve
- Who does this problem impact and how?
- Is the problem you’ve identified the actual oproblem that needs to be solved? Who do you need to talk to find out?
- What does your target market think the solution is?
- Who else is solving this problem?