A new MBA class started last week, and as I was going over the class overview, one of the students asked, “As a team, where do we start?” As I was giving my response, I realized that this is a question I continually obsess over: What is the best way for an entrepreneur to identify an opportunity worth pursuing? My knee-jerk response is always to start with a problem that requires a solution. Of course, this is the short answer because there is much more to it and how entrepreneurs enter the journey depends on the nature and genesis of the problem itself.
But you have to start somewhere, so I usually advise the team to discuss and coalesce around a problem to be solved. Then we go into various ways to frame the problem, such as a “job to be done” or driven by a desired behavioral outcome.
The vast majority of students that hope to learn about venture realization come with a particular solution in mind (and are typically very excited about it). Entrepreneurs and innovators tend to be biassed towards action and usually move to solution mode prematurely. As a starting point, this creates quite a challenge to dissuade them to change their focus, even temporarily. There is a need to allow yourself to suspend judgment in this context, providing time to refocus on the problem, find a proper frame, reframe as needed, and eventually hone in on a solution.
How do you go about persuading excited future founders to take a step back, consider what problem they are trying to solve, determine who is most in need of a solution (and why), and what outcome results from a productive solution? Answer: With great difficulty.
So let’s double click on some of the early steps to help aspiring innovators suspend their judgments, assumptions, and overall excitement for their solution and focus on the problem first.
From studying innovation for many years, I know that opportunities can arise from many different conditions. For many entrepreneurs, the idea forms from a challenge that they have recently experienced. Sometimes it can be something in their personal life, such as difficulty finding a pickup basketball game or ordering a kale salad in upper manhattan (really). Some of these personal challenges can be quite profound. For example, I have worked with several ventures focusing on mental health and wellbeing directly driven by the isolation we are all feeling during the pandemic.
Personal challenges and experiences can often be a great place to start. However, what many entrepreneurs don’t always consider is the statistical power of numbers. For now, the experience they are capturing is based on a small sample size, quite possibly of one person (yourself).
Entrepreneurial ideas can emerge from professional challenges that you and colleagues have recently experienced on the job. Why is this process so time-consuming? How do we solve this problem? How to reach new markets? And so on. These questions may pertain to your specific company, industry, or every global organization. It is very tempting to get right into solving these questions (and in some cases, such as innovating to make your job easier, I say do it!). But to build a venture out of it, one needs more due diligence, and assumptions need to be validated.
First Three Questions
As a starting point, I suggest that you and your team focus on three questions leading to an initial problem statement.
· What is the problem to be solved?
· Who primarily experiences this problem?
· What would the outcome be if the problem was solved?
What is the Problem to be Solved?
Being able to articulate what problem your venture is trying to solve is critical to developing a useful and valuable product and business. Many entrepreneurs, as well as product developers, find this a difficult concept to apply. It seems much easier to speak about what your product or business does functionally rather than look at it from a problem-solving perspective. However, it would be best if you framed any opportunity through the lens of the problem that needs to be solved.
The early attempts to articulate the problem can be quite challenging. Part of the challenge is that there is no one way to interpret a problem. So much depends on the context and situational factors associated with it. By nature, we tend to look at a problem through a narrow lens at first. We see the most obvious pain points and challenges. We don’t take the time to widen the lens and look beyond the obvious. In other words, we do not see the full picture.
Entrepreneurs need to probe beyond the initial comprehension of the problem to be solved. What’s missing from the current problem conception? Are there factors that are not being considered? Should we broaden the aspects of the problem that need attention?
There are several ways of expanding our view of the problem. The first step is to recognize how your own experience with the problem influences your perspective. In a sense, this is probably the narrowest viewpoint, one that is bounded by particular and personal conditions. It is not devoid of value, but one cannot stop here. A similar narrow perspective and just as biasing is viewing the problem from your domain expertise. All of us tend to look at a problem from our knowledge base and disciplinary lens. As an applied psychologist, I tend to look at problems in a certain way, certainly not always for the best.
Another way to widen your view of a problem is to expand the time boundaries. It is typical for an entrepreneur to look at the obvious details surrounding the visible occurrences of pain points and can be a challenge to zoom in on what is occurring in a relevant event or situation. For example, as I help entrepreneurs prepare for engaging those experiencing the problem (the customer), I instruct them to visually map their assumptions about the people and their experience with the problem through something called a customer journey map. The journey maps are framed as a story with a beginning, middle, and end. The challenge is to decide when the story begins and ends. By expanding the time horizon, you begin to see the pain point in a new light because, at times, the true genesis of the problem starts before the more manifest aspects of the problem.
A third way to expand your perspective on the problem is to look for outside factors affecting the problem, its genesis, manifestation, and outcomes. This is where I like to apply systems thinking to the problem. By looking at the problem as part of a system with inputs, throughputs, and outputs (and associated feedback loops), you can expand your perspective, finding not only hidden factors but potentially non-obvious aspects of the problem. I like to create a visual image of the system, starting by making a list of all the factors that may influence the problem and the involved people. I have found starting with defining the current outcomes (outputs) is a good way to start. If a person is currently trying to solve the problem, how does it end? What outcomes are considered positive, and which outcomes are sub-optimal? From there, I zoom in on the behaviors and occurrences that happen as the problem manifests itself. Lastly, I create a list of all potential inputs that may have created or influenced the problem’s occurrence.
It can be helpful to view the problem less as an obstacle and more as a task that needs to be accomplished. One way to think about your customer’s problem is to frame it as a “job to be done”. Based on a theory by Clayton Christensen, entrepreneurs can ask, “What is the customer trying to do?” By asking this question, entrepreneurs begin to consider what the customer is trying to accomplish and under what circumstances—who, what, where, when, and how are the activities taking place?
By framing the questions within a “job to be done” context, you can begin to empathize with what the customer is experiencing while trying to accomplish specific tasks. Most importantly, one learns what challenges and obstacles stand in the customer’s way of making progress and accomplishing desired goals. Additionally, it is important to identify all costs, such as time, money, or stress experienced by the customer. Innovative solutions arise when one fully understands the complete customer experience.
The above strategies help the entrepreneur and innovator thoroughly assess their assumptions about the problem before considering any solutions.
Who Primarily Experiences the Problem?
Many aspiring entrepreneurs are quick to point out their product is for everyone. While, in some cases, there may be some validity to this statement, it doesn’t matter because to reach and serve everyone who may require said product is a near-impossible goal. Especially when you start a venture with limited resources, you can’t possibly let “everyone” know about your business or provide enough products and services for entire populations. It would be best if you focused on whom you will want to attract and hopefully sell to in your business’s early stages.
The main task is to identify which customers are most likely to be experiencing the problem you are trying to solve. Suppose you apply the “job to be done” perspective; who regularly does the job in the specific circumstances identified? More importantly, which customers have a serious need to solve the problem and are actively looking to solve the problem by trying different solutions? Steve Blank refers to these active customers as “early evangelists.” They have the problem you have identified, know they have the problem, try to solve the problem, actively look for solutions, and have resources dedicated to solving the problem.
Engaging these serious customers will help you better understand the problem and create the early momentum that new ventures require to succeed.
If the Problem is Solved, What Outcomes Emerge?
The third question you should consider when defining the opportunity is focused on what the customer is trying to accomplish. What would the customer like to be able to do differently if they could find the optimal solution? As an example, from a functional perspective, the customer may want to complete a task faster, improve the performance needed to finish the job, or spend less money. When thinking about the customer’s desired outcomes, it often comes down to whether something can be done faster, better, or cheaper.
Of course, the customer is looking to do something, and therefore the functionality of the solution is an important element of any product or service. It is important that you also consider how customers want to feel if the problem is solved and the job accomplished. How will they feel emotionally if they can do things differently? Will they be happier? Less anxious? Excited?
Understanding how the customer will experience an optimal solution will help you later on when you are thinking about communicating the benefits to the customer. Most people select solutions based on both functional and emotional outcomes, but the importance of each is rarely equal, with emotions many times leading the consumer behavior.
As part of thinking about these benefits and value to the customer, you should also discover how value is measured by the person experiencing the problem. From a functional perspective, many outcomes are measured quantitatively. For example, if the goal is to save time, you should determine an acceptable amount of time it takes to complete the task in question. Time can be measured, thus assuring that the customer directly sees the outcome achieved.
Module Worksheet: Problem or Job Statement
One of the first worksheets that our student entrepreneurs encounter guides them through the aforementioned three questions. The responses help founders document their early assumptions about the problem, the customer, and the desired outcome from a potential solution. It culminates with a concise problem or job statement. For a copy of the worksheet, email me at firstname.lastname@example.org.
For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.
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