Have An Acute Focus On The Problem, Not the Solution, by Dave Parker

Posted by Amity Sims on 2013-10-30

Founder Feedback gives you insight from the startup trenches.

In a post from his blog, Dave Parker, VP of Product at UP Global and mentor for the Seattle Founder Institute, asks founders to think about whether or not their startup idea solves a customer problem, or is it merely a solution? Can you build a company around your idea or are you just a feature?

Below, Have An Acute Focus On The Problem, Not the Solution has been republished;


I love engineers and developers! But sometimes they build a solution that is in search of a problem.

I recently read a headline on a LinkedIn post that reflected the headline above. I didn’t get a chance to see the author or article (I think it was about QuickBooks or Quicken), but the headline struck me given my interaction with technical founders. Often I’ll have Founders and Entrepreneurs that come into the Founder Institute with an idea for a product or an app, it’s a solution. But does that idea solve a customer problem and can you build a company around the idea?

  • Is your idea a feature, or something that the founder discovered using a current platform or application? Building a feature won’t necessarily allow you to build a product or a company. For example, an App for Facebook, especially when it’s something you think Facebook could build. Building the App might solve the problem, but your real problem isn’t building an app, it’s your ability to get 100,000 users before Facebook builds the solution themselves.
  • A gap in the market not currently filled? A gap may not represent a market need if the existing solutions are “good enough” and the cost of switching is high. For example, better Accounting software that fills the gap between QuickBooks and Workday. Both work great as is, and the cost of switching and risk are high.


I worked on a technical hardware product some years ago that was a great example. The company had spent a great deal of time and engineering $$ building a hardware device for IT Security. The problem was that they had never clearly identified a (large) target market, or an initial launch market. They started with the solution then asked me to work backward to find the problem that the product could solve. Regretfully, it’s not that simple.


1. What problem are you solving and for whom?

This seems an easy enough question to answer. There are a number of ways to look at the market and the user for whom you are trying to solve the problem, but just remember that you aren’t the customer. I was meeting with a company last week and they have built a product and identified a single B2B customer that could be a customer of the product. That’s a great way to identify a potential launch customer, but as we discussed the broader market of buyers, the use case became very “fluffy” and they couldn’t identify a company profile or market.

1. If you are selling a B2C business model – what is the customer profile? It’s not everyone! Is your user male or female, young or old, a Mac or PC user? Etc. You don’t have to go so far as establishing a persona for the customer, but you should do that over time, as you better understand your customer.

2. For B2B, what are the market characteristics of the customer? Is it a tool for companies that sell to consumers or to businesses? Do they sell large price point, slow sales cycle products or do they do a one-call-close with an inside sales team. Is it a transactional sale that is driven through marketing and customer service and no sales person is involved? Those three examples have widely different selling models and the corresponding margin to pay for your product.


After you evaluate the market, you need to understand if that market is big enough to justify building the product. Don’t stop focusing on the problem, keep it front and center to your company.


2. What is the Solution?

If you follow the Lean Startup methodology, you should be able to identify the your minimum viable product (MVP) before you build it. We recently had a mentor in the Seattle FI program named Justin Wilcox and he framed the MVP slightly differently. For Justin, the MVP started with testing your riskiest assumption that you needed to prove or disprove first, for example:

1. Can it be built? Is it a technical challenge that can be solved?

2. Does anyone want the product? Again, you are not the customer, having a buyer of one is a bad business decision.

3. Would they pay for it? And what would they pay for it? This is only market research before you can actually take a credit card (B2C) or send an invoice (B2B).


One thing is for sure, don’t just keep coding or engineering before you answer some of these questions. You can spend the next 33,280 hours of your life on the wrong idea.

 

Dave Parker blogs at http://dkparker.comYou can also follow him on Twitter at @DaveParkerSEA.

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