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Are you solving the right problem?
How to define a problem, why it matters, and traps to avoid.
Hello, I’m Hema, and welcome to my newsletter First Impression. Each month, I write an in-depth post on positioning, brand, or GTM strategy for early-stage startups. Join startup founders, investors, and practitioners and subscribe to get the newsletter in your inbox.
Why problem definition matters
When I have one week to solve a seemingly impossible problem, I spend six days defining the problem. Then, the solution becomes obvious. —Albert Einstein
When I work with startups, I often begin with framing or defining the problem they are trying to solve. Let’s look at the publishing industry as an example. For those of us born before the iPad, our reading journey began with books. The publishing industry was huge. In 1998, American consumers spent $23 billion on books. In 2021, over two decades later, total book sales were $29.3 billion, including e-books. Not a huge growth rate.
The Internet and Amazon, in particular, transformed this industry. For a long time, the publishing industry blamed Amazon for eating its margins. I’ve often wondered how this industry defined the problem.
In the beginning, I imagine it was something like this: how can we sell more books?
Over time, after Kindle, Audible, and the iPad, the problem shifted to how can we distribute our content across digital devices easily?
If you were an academic publisher, then maybe it was; how can we make learning more interactive and engaging?
If you were a newspaper or magazine; how can we attract and engage more readers?
All these are worthy problems to solve, but all of them are framed from their current paradigm. Although this industry recognized that it needed to adjust to a changing world, it could not reimagine a future that might be, at a fundamental level, quite different from the past.
Fast forward to 2017. Substack launched with the mission of making it simple to start a publication that makes money from subscriptions. Substack framed the problem a little differently: How can we empower writers, thinkers, and creatives, to generate income from their own audiences on their own terms?
This framing of the problem or opportunity takes into account a couple of things:
First, it is framed from the user/customer’s perspective. After all, the publishing industry wouldn’t be here without writers, just like news media wouldn’t exist without journalists.
Second, it takes into account the shifting landscape. Social media is here to stay. Content creation, for better or for worse, is no longer in the hands of a few highly qualified and/or privileged people.
Third, we live in an age where anyone can be a celebrity with a large group of engaged followers.
Had the publishing industry paused and asked, How might we enable writers to be successful in the digital age? I wonder what that industry might look like today.
“The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong questions.” —Peter Drucker
In my experience, when I ask founders what problem they are trying to solve, I invariably get one or more of the following:
The problem we are solving is <insert your favorite category> (marketing automation, digital collaboration, data orchestration).
A description of their product (we do document version control).
Retrofitting their product/solution into a problem (we get your production environment to look like your development environment).
What’s wrong with this?
It doesn’t speak to the pain of a particular person, a group, or a job function.
It doesn’t frame this pain in the context of changes in the broader landscape in which the startup operates and the limitations of that landscape.
It doesn’t imagine a future that would look different because of your product.
Examples of well-defined problems
Below are two examples of tech companies we are familiar with and how they have framed the problem they are solving.
🎯HashiCorp ► How can we help developers manage their cloud infrastructure in a simple, streamlined, and secure way?
It speaks to a specific pain felt by a particular persona.
It is framed in context. Migrating to the cloud unleashed both velocity and scale, but delivering applications in the cloud was far from easy or standardized. That was the problem and the opportunity.
They imagined a world where security tools are not clunky and hard to use. They put the users first and incubated open-source solutions before turning them into enterprise-grade solutions. Finally, they are one of those rare companies that invested in product principles Tao of Hashi Corp and shared them openly to codify how they design products.
Did the founders of HashiCorp frame the problem in this exact way when they started? Probably not. They began with a much smaller problem to solve: Why does it take developers weeks to set up their dev. environment to be productive?Even with this framing, it is a well-defined, specific problem faced by a person.
🎯Stripe ► How can we make it easy for new businesses to start and succeed on the internet?
Although there isn’t a specific persona in this framing, Stripe founders found that it was appalling hard to charge for things online. So, although traditionally, a CFO made decisions around payment systems, they took a different approach and chose to empower developers with “seven lines of code” they could easily embed in their applications.
From personal experience, they knew that payment infrastructure was complex and involved a number of intermediaries, and the fees they sliced away from the online business’s revenue added up to a meaningful chuck.
They saw that all businesses would eventually be online, and although there was an incumbent, PayPal, their solution was not complete or comprehensive. They saw that solving payment processing was just the first step, and over the past ten years, they have built a suite of products that have become the payment infrastructure for many online businesses.
Most exciting companies don’t sell us better, they sell us different. — Authors of Play Bigger
Traps to avoid when defining a problem
✋🏽 Not being specific — This is the most common trouble I see when I work with startups. In their desire to be a solution that appeals to many, they resist specificity.
Here’s an example: “We want to help companies get maximum value out of their workforce.” Who is feeling this pain the most? What about our current way of working makes it difficult to get maximum value?
✋🏽 Being too narrow — The second trap is narrowly defining the problem to fit the wedge you’ve found into the market. Imagine if HashiCorp had defined their problem as “How can we help developers get onboarded quickly?” Part of their product (Vagrant) addresses this problem, and although this is specific, it misses out on the broader landscape and the changes they foresaw because of cloud migration.
✋🏽 Letting incumbents define the problem for you — Most founders I work with are trying to solve a problem that (a) they have personally experienced and (b) has no satisfying solution in the market. If this is true, which it often is, why would you allow the current, suboptimal landscape to define your problem? Why use the same language to frame the problem? Imagine Stripe selling its solution as “a clearing house for the internet” or as a “payment management and accounting software”?
Like me, you are probably a reader. You might remember this exchange between Alice and the Cheshire Cat from Alice in Wonderland:
“Would you tell me, please, which way I ought to go from here?” asked Alice.
“That depends a good deal on where you want to get to,” said the Cheshire Cat.
I don’t care much where—” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
“—So long as I get somewhere,” Alice added.
“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”
Many founders, particularly technical founders, get excited about the technology, its incredible possibilities, and promises. But jumping right in and starting to build your product without asking strategic, deeply critical questions first is dangerous.
It’s hard to walk away from this gorgeous thing you’ve just built. You might have invested mad amounts of time and energy in a solution that nobody wants that badly.
So do yourself a favor. Stop and ask the hard questions first: What problem are you trying to solve, for whom, and why should it matter now? How will the world be different because your product exists?
Without answering these questions, just like Alice, you’ll get somewhere, but it might not be where you had hoped to be.