The Problem with the Problem-Based Approach

A lot of today’s start-up resources, such as the lean methodology, advocate a problem based approach where a business should identify a problem that a customer has and solve that problem better than anyone else. These problems can be identified through careful observation or even conducting customer interviews, recently popularized by the lean movement (I will comment on this at a later date).

Although this seems to be a good way to identify some business opportunities, I argue that by exclusively taking a problem-based approach, you miss opportunities to which there is no obvious problem/solution dynamic. You may not see a problem with the current state of affairs or a customer might not be able to identify a problem that they have with a particular product or service. Thus if you identify an opportunity and go to your target customers to validate your idea, they might give you a false negative. This is the danger of relying on the problem-based approach where you seek validation from customers.

This is especially true when you are trying to change consumer behavior. Customers may be so used to doing things in a certain way that they may not see it as a problem, even if it is inefficient and costly when compared to your way. I had this happen to me when I was working on endlessprotein.com, an application that would automatically ship you your supplements so you would never run out. We did the math and it was far more cost and time effective to buy from us as opposed to a physical retail location. We took the problem-based approach and our idea was immediately invalidated from customer interviews. Our target customers were so used to doing things the same way for decades that they saw no problem with it and thus our idea was invalidated. Of course this was not the only issue at hand but I look back and wonder what it could have been if we had not used a problem-based approach but instead relied on the market data that had brought us to the idea in the first place.

I’d like to use amazon.com as another example. Jeff Bezos saw the opportunity of bringing retail to the internet. After looking at various verticals, selling books was the most compelling entry point for a variety of reasons. If he had gone out and asked academics what problems they had with buying their books they might not have seen anything wrong with the way they did. If he packed up his things and called it quits after his customers could not identify a problem, we would not have Amazon today.

Thus, your customers can be dead wrong and you should have other sources to validate your opportunity. Sure, it’s great to get feedback from your customers for improvement but don’t throw an idea away just because they are stuck with some relatively bad behavior and don’t know any better. Instead, show them how your kick-ass product makes their current way of doing something look inferior after you’ve identified the opportunity.

I personally like looking at market data and asking a lot of good questions to find opportunities. A good resource on how to do this is The Innovator’s DNA.

The Team – Personality

When you hear someone give advice regarding entrepreneurship and start-ups, they will probably mention the team as the most important factor in the success of a particular venture. After more than 2 years of multiple ventures, different teams, and many failures, I would have to agree.

People will make or break your start-up, regardless of the idea. Ideas are a commodity but the talent and personality required to bring them to life are scarce resources.

Note how I said talent and personality. Personality is just as important as being a delta squad coder or a marketing guru, if not more so. I am convinced that it is a combination of both that yields success.

When compared to talent, personality is rather ambiguous so I’m going to describe a few characteristics that I feel the founding team must possess.

Passion

This is critical. You have to love what you are doing in order to succeed as an entrepreneur. It’s what will keep you going despite working insane hours for (probably) no pay. If you’re sick of it after a short while, you should probably consider something else. Team members must share the same passion for the task at hand. It is otherwise doomed.

I’m passionate about being an entrepreneur and creating awesome stuff. I’ve worked with people in the past who were passionate about an idea, but did not share with me the love for the act of entrepreneurship. Needless to say it did not last very long when we realized that our passions were not aligned.

Work Ethic

It should be no surprise to anyone that you will likely be working insane hours. I’d say at least 12 a day if you’re serious. Even on weekends. You have to be willing to work like a dog if you want to succeed.You have to be able to get things done and grind/hustle day-in, day-out.

Tying in my above point on passion, you have to love what you do to be able to work like this. There’s no way around it. Because this is something that requires every fiber of your being, I truly believe you cannot force yourself to do this if you don’t like it.

Focus

This isn’t a part-time gig. You’re either all-in, or you aren’t “in” at all. If you’ve got your hands in 10 different cookie jars then you might want to reconsider this. You’ll be wasting your time otherwise. If you see an opportunity, you must seize it, regardless of the resources available to you at that particular moment in time. This is what being an entrepreneur is all about.

People in their early 20’s have an amazing opportunity. They can take huge risks and suffer pretty much no consequences if they fail. I think the best time to build companies is as soon as you graduate because you can focus and have a huge impact. You probably don’t have a mortgage, kids to feed, or other responsibilities. As long as you can maintain some basic standard of living, why not go for it? Some people might that you’ll have a lot of time to do these things later in life. Guess what? You probably don’t. Take advantage of the time you know you have now.

Intestinal Fortitude

Before all the glory, the money, and the TechCrunch article, you’re going to fail. A lot. You will be beat down time and time again. It will be an emotional roller coaster. If you want pack up your bags after a minor setback, this is not for you.

When working with someone new (a potential partner, perhaps), pay very close attention to what they do the first time you have some sort of failure. If they want to abandon ship at the first sign of trouble, you should strongly reconsider your choice to work with them, regardless of how talented he or she might be.

Talent might bring the team together but personality will keep the team together.

By no means is this an exhaustive list, just my thoughts for now. I may follow up with this on a later date with some more points.

Image courtesy of http://www.flickr.com/people/jiheffe/
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