From 0 to startup in 5 episodes. Lesson #1: Always start with the problem

Content taken and edited from the courses of the School of Entrepreneurship & Innovation

Each one of us is constantly looking for solutions that can simplify or improve our lives in our daily tasks. This search is the basis for the birth of new businesses. In fact, as long as consumers have problems to solve, there will always be a market for new ideas. For aspiring entrepreneurs, however, the real stumbling block lies in identifying a real, heartfelt and relevant problem on which to build their business idea. There is no mathematical formula that can ensure the success of this process, but there are methodologies that can guide us on the right path.

The first point to metabolize, therefore, sounds very obvious, but it is actually one of the most complex: to find an idea to develop, you always have to start from a problem and never from the idea itself.

The reason, which is also apparently trivial, is that if the idea does not respond to a real problem, no one will be willing to pay to buy it. Consumers pay for what they need, to solve their problems, it doesn’t matter if an idea is an absolute innovation or if it uses state-of-the-art technology: these features are not enough to convince consumers to spend their money to buy it.

Therefore, proceeding with the first step, it is necessary to identify a macro problem from which to start from. This may come, for example, from direct personal or professional experience, or from market research and trends. The starting problem does not necessarily have to represent a concentrate of genius and complexity, on the contrary in most cases the simple things are the most useful and functional ones.

Airbnb’s founders

Let’s take the example of Airbnb, today one of the best known startups in the world, which in 2019 reached a turnover of 4.7 billion dollars (then in 2020 the Covid-19 prevented us from travelling and the turnover collapsed, but that’s another story). Airbnb was born in 2008 from the intuition of a couple of roommates, Joe Gebbia and Brian Chesky, who could no longer afford the expensive rent of their San Francisco flat. They also knew that the design conference in the city would soon fill the hotels and visitors would find it hard to find a cheap place to sleep. Airbnb’s idea, therefore, started out with two heartfelt problems: the one felt by homeowners who can’t afford to pay their rent or mortgage, and the one felt by tourists, to find a nice place to stay at a fair price. We already know the rest of the story.

Understanding whether the macro problem we have identified is really the right one on which to build our idea is a fundamental step. To do so, it is important to study the problem, to understand it thoroughly, to talk to those who are suffering or causing it, but let’s go step by step.

As we have anticipated a few lines further up, there are no magic recipes, but there are methodologies and tools to be used along the way. Let’s start with Landscaping: a framework that allows us to have a first picture of the status quo, emerging initiatives and trends that in the future will have a significant impact on the topic, whether positive and/or negative.

Landscaping example from a course of SEI

From a practical point of view, this framework can be divided into three macro sections: in the most internal circle, “long term trends“, we need to identify the trends that will have the greatest impact on the problem in the future; in the second circle, “current system“, we need to list the solutions already established on the market that partially solve the problem you have decided to work on; while in the more external area, “emerging niche initiatives“, we will research for the there will be solutions not yet established on the market, such as startup early stage or research projects, that partially or entirely solve the problem. 

This tool will allow us to understand and to get to know the landscape in which we are moving.

The next step is to identify and map all those who have an interest and/or influence on the specific problem we have decided to address. From a practical point of view, the Stakeholders Map is usually made on a large sheet of paper where the problem is placed in the centre and around it, all stakeholders are placed concentrically based on their degree of involvement. If the framework is made on paper, it is always advisable to use post-it notes, for more flexibility in editing.

This tool is useful to identify the key players of our problem, which could in the future be our customers, suppliers, or competitors. It is of utmost importance to identify them at this stage because they are obviously a fundamental element for understanding the problem itself.

stakeholders map
Stakeholders Map example from a course of SEI

The next framework is called Frame the Challenge and aims at shaping and formalising our knowledge of the problem in a clear and analytical way.

It is in fact a set of questions such as “what is the problem you want to solve?”, “who is the actual victim of this problem?”, “why is this problem relevant?”. It is very important at this stage to answer with precise metrics and relative orders of magnitude, if you do not have the answers to these questions, it is certainly necessary to deepen the research phase

Frame the challenge
Frame the Challenge example from a course of SEI

At this point you should have a sufficiently clear picture of the problem you want to solve. The next step is then to prove that your assumptions are correct, that people actually feel the problem and are willing to act to solve it. 

We then move to the interview phase, where you ask your target audience the right questions to validate the existence of the problem you have identified.  You can do this either in person or online, e.g. via Google Modules. Be careful, however, that incorrectly formulated questions can lead to conclusions that are far from reality, which is why it is important to ask neutral, concise questions, ask one thing at a time, use the same questions for all respondents and, especially online, formulate closed questions, using a scale of votes.

Interviews’ results example from a course of SEI

After collecting and analysing the interview data, it is time to formulate a “Point of view”, i.e. the expression of the problem in a concise but complete sentence. The best formulation is: “X needs Y because Z” in which x is the description of the target user, y is the description of the specific need felt and z are relevant facts that explain the need.

Point of View example from a course of SEI

Only once all these steps have been successfully completed, we can say that we have completed the problem identification phase and we are ready for the ideation phase

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