If You’re Creating a New Venture, Where Should You Start?

For anyone starting a new business that question can be pretty daunting because it can feel like there are a million things to do—write your business plan, create a legal structure, get investors and so on and so forth. In fact, that feeling of being overwhelmed is often the reason people give up or don’t even get going in the first place.

 

So what is the first place an entrepreneur needs
to focus when starting a new venture?

 

(Hint, on thoroughly defining the “Problem” and “Solution”)

If you’re starting a business or wanting to, chances are it’s because you see a problem in the marketplace that you think you might be able to solve better than what others have. The old adage of “necessity being the mother of invention”, right?

Entrepreneurship and innovation are really just that when you boil it down—seeing problems and their solutions in a way that others don’t and then building innovations to solve them in ways that others haven’t. So before doing any of those aforementioned things (especially your business plan since the following exercise I’m about to describe will inform much of it), start by clearly defining the problem you’re seeing.

Why? 

Albert Einstein once said…
If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it.
…huh, smart guy.

If your startup is going to fundamentally be about solving a given problem, then you need to know that problem intimately. Otherwise, you might overlook opportunities that could sustain your business or worse end up pursuing solutions that aren’t aligned with your strengths or the ideal market opportunity. And understanding and defining the problem at the core of your business model will be fundamental to all the other things you need to do to launch your business. Things like, define who your target customer is and strategize how to market to them, decide who your main competition is or effectively price your product. Not to mention, the only way to explain that problem effectively to key constituents and stakeholders—customers, investors, employees—is to get to know it thoroughly through exhaustive analysis. Make no mistake, your business will live or die depending on how well you do that one thing…which is a pretty good reason, huh? 

Here’s how…

If the initial core problem is the wellspring for everything else you do, it needs to be very clear in your mind before arriving at the best solution (i.e. your product, service, etc). So start by researching the problem. Figure out its causes. Assess the existing solutions in the marketplace. Then start thinking about how your solution will be better. What’ll be its strengths and weaknesses when compared to other solutions? Think about your user. User-centered solutions are key—you’ll find them at the heart of most successful startups.  

Here are a few ways to get started defining your problem-solution. The answer to these questions will help you articulate your business to stakeholders and along the way, you will learn more about the solution space (the industry, the segment, etc.).

  1. What is the problem?
  2. Who has the problem?
  3. What causes the problem?
  4. What’s the best way to describe the problem?
  5. Does everyone see the problem the way you see it?
  6. If not, why? (Describe the way those people see it, be sure to include all other perspectives)
  7. Who benefits from the problem being solved?
  8. How do they benefit?
  9. Is there demand for solving the problem? (Note: Keep in mind, “demand” more than “want” or “need”. Demand for a solution is a person willing to part with their money to solve the problem. Someone may want and need a problem to be solved but whether they will pay to solve it is often another thing. You need “demand“ to build your business.)
  10. How much pain (from the underlying problem) is the prospective customer willing to endure before they feel a dire urgency to solve the problem?
  11. What are the economic costs of the problem?
  12. What other things influence the problem?
  13. What solutions to the problem already exist? (Be sure to include all solutions, including those that are less than ideal.)
  14. How is your solution (your product, service, etc) better and more innovative?
  15. Is your innovative solution cost effective?
  16. How will your revenue model justify your costs of delivering the solution?
  17. Who benefits directly and indirectly from your solution?
  18. What social and economic benefits will the solution generate?
  19. What social and economic repercussions might the solution face?
  20. Are there potential benefits that the solution neglects?

Write up a paragraph answering these questions as thoroughly and as succinctly as possible. Then share it with others to get real feedback on whether it seems reasonable and clear. Good luck!

April 5, 2020
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