Finding a problem worth solving

You have just come through three tracks on risk, luck and survivorship. That order was deliberate. This track is the one where courses usually stop being honest, and the previous three are the defence against it.

So: a business is not an idea. A business is a problem somebody has, that hurts enough to act on, held by enough people, who can pay, and for whom your answer is better than what they are doing now.

Five conditions. An idea is what you have when you have checked one of them.

The strongest signal is a bad existing solution

The most useful thing to find is not an unserved need. It is a served need, served badly, by something people are already paying for or already spending hours on.

An unserved need is ambiguous: it may be unserved because nobody thought of it, or because it is not a real need, and you cannot tell which from the outside.

A badly served need is not ambiguous. The spreadsheet held together by one person's memory, the process everyone complains about in the same words, the tool that three people at the company have separately built a workaround for — these are receipts. Someone is already paying, in money or in hours, which settles the pain question and the ability-to-pay question at once.

What would you do

Four things you could work on, all of them plausible, all of them something you could build.

You have six years of experience in logistics operations, no funding, and no reputation outside the companies you have worked at.

Optimising for

The highest chance of reaching paying customers within twelve months, using savings of about 25,000 and no outside money.

You cannot know

• Whether anyone will pay a price that covers your time, at any of the four
• How long each takes to build to something a stranger would use
• Whether the people you know would actually buy from you or only encourage you
• What a competitor with more money does once any of these starts working

Choose an option

An app that helps people plan meals. Everybody eats, so the market is enormous.A tool that replaces the shared spreadsheet three of your former employers each used to schedule collections, all of which broke in the same way.A marketplace connecting small hauliers with businesses that need one-off deliveries.Consulting on logistics operations, charging by the day.

Ability to pay, which is the filter people skip

A problem is not a market until someone with money has it.

Three failure shapes recur. The person with the problem is not the person with the budget — common in anything sold to large organisations, where the frustrated user cannot authorise the purchase. The person has the problem and no money — common in anything sold to individuals in difficulty, which is where a lot of well-meaning ideas go. Or the problem is real and the amount it costs them is smaller than the amount you would have to charge.

That last one is the quiet killer. A thing that saves someone forty minutes a month is genuinely useful and worth almost nothing, because forty minutes of mild irritation does not convert into a purchase order.

What would you do

You have settled on the scheduling tool. You know eleven companies with the problem, and you have worked at three of them.

Building something usable would take about four months of full-time work. You have savings that cover roughly nine months.

Optimising for

Learning whether anyone will pay, spending as little time and money as possible before finding out.

You cannot know

• What they would actually pay, as opposed to what they say they would pay
• Whether the person who feels the pain can authorise a purchase
• How much of the problem is the software and how much is their own process
• Whether the eleven are enough, or whether there are two hundred you cannot see

Choose an option

Build for four months, then show it to all eleven.Spend two weeks talking to all eleven about how they schedule collections today, with nothing to sell.Offer to run the scheduling manually for two of them, for a fee, using whatever tools you like behind the scenes.Ask the eleven to pre-pay for something that does not exist yet.

Check

Which of these is the weakest evidence that a problem is worth solving?

Choose one answer

Several people independently described the same frustration in similar wordsA number of people said the idea sounded useful and they would probably try itTwo companies are paying a person part-time to do this by handA competitor exists, is unloved, and has been in business for eight years

Check answer

Worth remembering

• A business needs five things: a problem, enough pain to act on it, enough people, ability to pay, and a better answer than the current one.
• A badly served need is stronger evidence than an unserved one, because someone is already paying in money or hours.
• Ability to pay fails in three ways: the sufferer has no budget, has no money, or the problem costs them less than the price.
• Enthusiasm is free, so approval from people who have given up nothing is the weakest evidence available.
• Doing the work manually for a fee tests all five filters at once and answers with a payment rather than an opinion.