The Problem You Solve

When you meet someone, the first question often asked is, “What do you do?” If you respond by saying, “I’ve founded a company,” they’ll respond by asking, what your company does.

What they’re asking is, “What problem does your business solve?”

This simple question is the foundational pillar to any successful company. You should be able to explain what problem you solve in less than a dozen words. The explanation should be easily understood by any potential customer.

Consumer vs. Business Problems

Consumer product descriptions need to be more straight forward than business products. Consumer problem statements should be simple enough for a drunk person at a loud party to immediately understand.

Business products, however, need context. Business products are challenging to describe to people who haven’t directly experienced the problem. They solve a specific problem for a particular subset of people. To explain what your product does, demonstrate the pain. Explain why potential customers pay for your product and when they give you money they have a smile on their face.

Needs and Wants

Humans are strange creatures. We tend to overspend on solving problems that fulfill our desires. For instance, if you can get your customer an attractive date on Friday night, they can’t give you their money fast enough. This is often presented as, “What deadly sin is your product fulfilling?”

Customers are willing to pay immediately for their wants but not their needs. This takes much more convincing.

_When we _want something, we don’t need to be educated. __

When we need something, we don’t know it.

Products that fall into the need category require much more capital for market education.

Current Solutions

One question that will arise is, “How are customers currently addressing the problem?”

All problems have current solutions. Damon Cortesi likes to say, “Anytime I see a spreadsheet, I think it should be a web application.” Spreadsheets are common current solutions to problem sets. If you see someone using spreadsheets to solve their problems, you can probably make a business around it.

If the market already has a solution - an incumbent - acquiring customers will be more challenging. When building a better mouse trap, you need to differentiate yourself by a large factor.

Regardless of what your customers currently do to solve the problem, your product can’t just be better. Ben Horowitz says, You have to be 10x better and take the market faster than anyone else.

The primary thing that any technology startup must do is build a product that’s at least 10 times better at doing something than the current prevailing way of doing that thing.

Revising Your Problem Statement

Similar to copy editing you need to cut words out when describing your problem. Initially, you will iterate on your problem statement. Telling people different things to craft a better explanation. But how do you know when your description is good enough?

If a common response to your explanation is, “I’ve had that problem.” It’s not good enough. They aren’t throwing money at you to solve it. You need to find a better way to explain it. The problem should be so bad, that potential customers are willing to do anything to solve the issue.

When you state the problem and people respond with, “Where can I sign up to use it?” You’re done.