If you ask most entrepreneurs, “how do I start a business”.
They’ll usually respond with, “first you have to find a problem”. While we all know that business is about solving problems. Telling people they have to find a problem is not very helpful.
The question that I’ve often wondered is how do you know that the problem you have is worthy of your time and effort. How can you know that you are not addressing a symptom rather than the problem itself?
For several years, I used an excellent book to teach how to think creatively by Tim Hurson. The book was Think Better: the innovators guide to productive thinking. What I’m about to discuss here is my adaptation for entrepreneurs, taken from this excellent book.
The first question you need to ask is, what’s going on here. A problem is usually the result of discontent about a current situation. Therefore, it is important to describe the “discontent.”
By having a thorough understanding of the problem, you have a better chance of getting to the cause of the problem. Let me give you an example.
If you visit Paris, you will learn that it is difficult to get anything other than fast food to eat on a Sunday. Most restaurants are closed. It requires special government approval for a business to stay open on a Sunday.
Why is it a problem? You’ll have to search to find a fast food restaurant if they want to eat on a Sunday. Not all areas of Paris have easy access to fast food restaurants. While fast food restaurants are common in Paris, not everybody likes fast food. If you don’t like fast food that presents a problem.
If a tourist is renting an apartment with a kitchen, then it may not present a problem for these tourists. If they don’t rent an apartment with a kitchen, then they’ll have to eat fast food on a Sunday.
The question, of course, is… are there enough people, who don’t like fast food and don’t have a kitchen in their apartment who want to eat restaurant food on a Sunday?
Some people might regard this as an opportunity. But, if a tourists average stay in Paris is less than a week, then they are only likely to have this problem once. Most of the large fast food franchises are open on a Sunday. If a high proportion of tourists rent an apartment with a kitchenette is it a problem for the majority of tourists?
It’s important to write down all the effects and impacts of the problem. Who does it affect, when and how.
The television show Shark Tank has had many examples of people who didn’t understand the extent of their businesses problem.
In an early episode, there was an engineer that created a unit that cut the plastic top off ice sticks. According to the engineer, the problem was it was dangerous for young children to use scissors to cut the plastic top off. So you can see the extent of the problem was young children under five who used scissors to cut the plastic top off their ice sticks.
Of course, the question that comes to mind is; how important is this problem? After all why couldn’t a parent or an older brother or sister cut the top off of an ice stick?
So the engineer went to work designing a solution to this problem. It took two years and $250,000 developing the unit that solved this problem.
According to the investors, the problem wasn’t serious enough to justify that amount of time and investment. It’s no surprise that this venture didn’t receive funding.
The problem has to warrant investing the time and money to set up a business to solve it.
What information do we need to have a good understanding of the cause of the problem?
What do we know and, what do we need to find out about this problem?
In our eagerness to jump in and solve problems, we don’t tend to spend enough time understanding the cause of the problem. And rarely do we make a list of what we know and what we need to learn. We usually just make assumptions.
Several years ago I sat in on a presentation to some business angels. Two young men had developed a website that stored the exercise routine and results of gym attendances. The aim of the website was to motivate those folks that hadn’t entered data into the system for more than several days.
The aim was to encourage people to stay motivated. At the heart of this business was to understand why people missed training sessions.
Merely telling people that they hadn’t trained was no help whatsoever. They didn’t understand the cause of the problem – why people missed training sessions. They also assumed that if you just remind people they may feel guilty, and they’ll go to the gym.
Who else is affected by the problem and why? But also, who is involved in the creation of the problem? Or who can influence the solution of the problem?
When I purchased the house, I currently live in I received a diagnostic before I signed the sales agreement. What I didn’t know at the time is that the diagnostic was meaningless. The diagnostician turns the water on. If the water runs and there are no leaks, he’ll give it a tick. “Yep, that works”.
When we moved into the house, we found seven leaks, a broken toilet bowl that was losing water at its base, and the plumbing in the basement in need of repair.
I asked other home buyers their experience. I heard a whole raft of complaints about the poor standard of diagnosis. Tradesman, where I live, don’t regard diagnostics as an important part of their work.
There are three important players in this industry. A government that created the regulation that requires all homes sold must have had a diagnostic, the trades industry and the home buyer.
What would be an ideal solution to the problem? It’s important to be very clear here. Hurson suggests we start a question with “I wish” or “if only” to stimulate our minds to think of an ideal solution.
In the previous example, the response would be. If only I had a diagnosis that represented the true state of the electrical and plumbing of a residence.
If you cannot visualise a clear outcome, it would be reasonable to suggest you still don’t understand the problem. Or perhaps it is not a problem that is worth solving.
The outcome should be determined after you’ve gathered all the data in the first four steps. It isn’t until you know enough about the problem that you can design a solution to the problem.
The number one reason most businesses fail is because they make assumptions about the problem, their audience, the industry needs. Many of us are quick to jump to conclusions whenever we try and solve problems.
Without fully understanding all aspects of a problem how can we know that there is an opportunity to create a new business?