Filtering out the problems
Once you have a list of 20 to 30 potential problems to solve, you’ll filter them down to a manageable list using two criteria of fit and potential.
The fit is about how excited you are to work on the problem, whether or not it plays to your strengths, experience, and skills.
Potential is about solving a real-world need that has the opportunity to be different from other offerings already in the market or whether there is a real need for customers who are desperate for a solution. It will be a personal satisfaction knowing that you have made a difference.
Determine which problems score high on both dimensions.
Narrow to one or two problems through this process.
If you find yourself leaning towards one even if it not being the highest-ranked, that’s fine!
Trust your gut. It’s just a helpful first pass to narrow the list.
Structuring and understanding the problem better
Before you can prescribe solutions, you must know exactly what the problem is.
For each short-listed problem, you have to gain a deeper understanding of the problem.
Facts and assumptions need to be checked.
As an example, you came across this problem statement, “I want to take a job, but I don’t have the transport to get there. Furthermore, I don’t have enough money to buy a car.”
The problem can be about three things: job, transport or money.
We need to analyse the problem further by asking the following questions:
- “Does he really need to drive to work?“
- “Does he really need money to buy a car?“
- “Does he really want the job?”
If we conclude that this person needs the job but has no transportation to get to work, then we can brainstorm solutions as to how he can get to work which may include buying a car.
Brainstorming all possible solutions to the problem
Consider the following to prompt you on the breadth of potential solutions:
- What products do this? What aspects are helpful to your customers and which are unnecessary? What is missing from these that your customer cares more about than the customers of this product?
- What services support customers with this problem? Are there forums, blogs, software, training, platforms, apps, consultants, etc. who can provide the solutions? What are the pros and cons of each? Where are the gaps for the customers you have identified as lacking a solution?
Spend some time to come up with solutions to problems.
This is where it’s important to really consider the full breadth of options without pre-conceived notions or assumptions of how the problem may be solved.
Remember that the existence of competition does not mean that there is no opportunity!
In fact, competition shows that there is a real need.
Your job is to find a unique way to better and to fully meet the needs of your customers while seeing what opportunities that your competitors are not meeting.
You could also give a better quality product or service.
We assess the feasibility of this solution by using the criteria of ability and willingness to pay for the solution.
The real test is whether your customers will take their wallets out and pay you the money that you are asking for. If they are, then your solution has passed the test.
Some customers are able to pay but are not willing to take out their wallets because they do not see the value in your product or service (i.e., rich investor).
Some are willing to pay but don’t have the money to pay because they don’t have the money to pay you (i.e., university students).
In our example, we came up with a possible solution to “taking the bus to work“.
This person is willing to take the bus, but he not able to take the bus because his work involves shift work and the bus only runs at peak hours.
He has given a good reason for his inability to take the bus as an option, not an excuse to do so. (Learn how to get rid of excuses here.)
There’s no magical formula for the perfect solution, but it’s important that you are passionate about what you are working on, having the ability and capacity to execute your plan, and feel confident in its financial potential.
Critically evaluating your proposed solution
The next step is to understand whether your newly discovered solution for a potential problem is a true business opportunity that will make you money in the long-term.
You’ll do this by developing an opportunity statement.
This statement will guide your thinking and analysis across three critical components that must be evaluated.
- What exactly is your customer value proposition?
- What do you expect to gain and give personally?
- What are your personal and business goals?
Crafting your opportunity statement based on your customers’ unmet need is an important next step in moving from idea to business concept.
Have a clear understanding of the business concept and goals underlying the initiative you plan to pursue.
Clear communication is important as people must be able to easily grasp and understand your message and business concept.
You must understand why you have chosen to pursue this problem by offering your solution.
You should be able to convey the reasons for your choice to everyone including family, partners, employees, and investors in a clear, concise, and compelling manner.
Your final opportunity statement should be a one-page document consisting of the following sections:
- business concept encapsulating your customer value proposition,
- your personal goal, and
- your business goal.
Firstly, you need a clear, concise and compelling business concept highlighting the customer value proposition of your proposed initiative.
Your customer value proposition should consist of the following:
- A clear description of the product or service you intend to offer to your customers.
- Identification of who are your customers.
- The compelling business needs that you intend to address or solve.
Your customer value proposition is the pitch that informs, excites, and calls to action to all stakeholders who may be interested in your solution.
The outline for writing a value proposition statement:
For (target audience),
our company is the brand of (industry or other frames of reference or type of product/service)
that delivers (quantified primary benefit/promise)
through (key attributes/strategy).
Secondly, your personal goal will explain why you are the best person to develop and lead the initiative you are proposing.
This is an important step in answering the questions of why you and why now.
Ask yourself the following questions:
- Why am I doing this?
- What will this do for me?
- What will this do to me or require from me?
You must ask yourself these questions and answer them honestly after careful reflection and consideration of many factors as to why are you doing this and what you expect from your efforts and what this endeavour will require of you.
Your answers should clarify the why you and the why now and how your unique qualifications, capabilities, motivation, and dedication will enable your success.
Finally, your statement should include your business goal highlighting the proposed business and revenue model and competitive advantages of this initiative, and how you will organise your new venture to thrive, survive the battles of competition, and becomes profitable.
You must be able to understand and define how your business will be organised by answering the following questions.
- What is the business model? (Retail, wholesale, online, business to business, business-to-consumer, etc.)
- How will the organisation be structured or organised?
- How will you operate it?
- What is your revenue model?
- How and when will you make money?
- What are the competitive advantages underlying this initiative?
In developing these goals you must understand and define the essential components and structure of the proposed venture.
When developing your opportunity statement keep in mind the following:
- People want to know why the idea is worth pursuing.
- Do not fabricate, exaggerate, disguise, cover-up, or mislead people.
- Do be honest, forthright, and personal without being too friendly or too intimate.
- Do show your passion and interest.
- Be willing to accurately portray the strengths, capabilities, and the unique and compelling nature of this initiative.
By crafting your statement into a clear and crisp one-page document, you will learn the basics of effective, efficient, and compelling communication.
Clear communication is an essential skill that will make your idea heard.
It’s also about accomplishing more by working with and through others who share your vision for success.
Understanding the impact of trends
The next phase of our analysis is to seek to understand the impact of observable current trends and determine how they can cast directional insight into the potential future of your business idea.
We need to focus our thinking and analysis on discerning, adapting to, and meeting potential future challenges so that you can stay relevant and be financially sustainable in the long-run.
Discuss your findings with your significant other, family, and friends.
You may be surprised and you may greatly expand your possibilities for a different and perhaps more fulfilling work-life balance.