Bootstrapped Founder #88: Properties of an Interesting Problem

Dear founder,

Let's look at what makes a problem interesting enough to note it down in our search for the perfect business opportunity. Different people will define the word "problem" differently. I think that a "problem" is anything that stands in the way of people accomplishing their goals. If they feel some sort of pain you can relieve, that's a problem. If they have a job that needs to get done or a goal you can help them achieve, that's a problem. Even if you can help them gain more of something than they have now, that's a problem that you can help solve.

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Here's the problem with problems: they are something intangible, something that is individually perceived. Every person feels a problem differently.

Consider two people with the exact same job in the same industry. Imagine we’re looking at bookkeepers who need to import the monthly sales figures from a SaaS business. One of them feels the problem acutely, having to go through thousands of invoices by hand every month, while the other person has found a makeshift solution using an Excel macro and therefore is only mildly inconvenienced.

Consequentially, only the first person might be looking for a solution. In fact, the same person might perceive any particular problem differently over time, as they put systems in place or experiment with a solution to deal with the challenge.

Since problems are perceived strongly or weakly, we need to look at what happens at either extreme. People don't pay for solutions to problems they don't mind having. If a person doesn't feel pain, they aren't looking for a painkiller. They probably won't even prepare for a time when they might have the pain in the future. But once they feel the pain intensely, they will look for a remedy immediately.

There is the concept of building a product that is a "painkiller instead of a vitamin." Painkillers solve clearly defined problems right here and now, while people take vitamins in the hope that they will prevent potential issues. A painkiller's value is immediately apparent, while a vitamin may or may not provide the intended returns. Still, both painkillers and vitamins sell pretty well, just to different audiences.

Particularly if you are self-funded, this is a critical consideration. Do you want your product to be the main dish, or are you happy with it being the optional side dish? Everyone orders the main dish when they go to a restaurant, but a side dish can find a much better-defined audience. When we build main dishes, we might compete with much better-financed businesses. The moment we go for side dishes, we risk building something that isn't a must-have.

There is no definitive answer to which option you should pick. Founders are successful with both approaches: you can find opportunities to build solid and sustainable businesses either way. So how can we increase our chances of finding a problem that, when solved, will allow us to create a business that enables us to reach our entrepreneurial goals?

I believe that we have a shot at success as long as the problem we solve is critical. The moment we focus on helping our audience deal with a critical problem, we build something that people actually need because it solves a critical problem.

A critical problem is both important and urgent. It's likely a painkiller, as vitamin-like problems are optional by definition. Solutions to critical problems are "must-have" products. A nice-to-have product solves a non-critical problem.

Before we dive deeper into the properties of such critical problems, it's helpful to understand what kinds of problems you'll encounter in general since criticality is highly dependent on where a problem originated.

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The Three Kinds of Problems

Critical and non-critical problems alike fit into one of three categories. They can be:

• Time-related problems: “This takes too long. This happens too often.” Productivity issues and tedious chores cause pain because they make people feel like they're wasting their time. Whenever people complain about something being inefficient or tedious, you are looking at a time-related problem.

• Resource-related problems: “We can’t afford this. Too many people are working on this.” If you hear people complaining about a waste of money, prohibitive costs, regulatory compliance, or the wrong people working on the wrong things, you're looking at a resource-related problem.

• Problems of the self: “This makes us look bad. This prevents us from getting where we want to be.” These intrinsic problems are felt on a personal level. Everyone wants to feel accomplished and recognized by their peers. Anything that touches the fields of Reputation, Accomplishment, Advancement, and Empowerment can be considered an intrinsic problem.

In many ways, you can trace most time- and resource-related problems back to a problem of the self:

Always consider that overtly obvious problems might have a hidden side-effect that causes an intrinsic problem as well.

Most critical problems, therefore, are always partially intrinsic. The good thing is that the problems of the self cause people to act, and that's something we can observe. Whether through Google Search keyword rankings or because someone complains about something on Twitter, critical problems leave a detectable trace.

The Properties of Critical Problems

If you look at a problem and need to figure out if it's critical for the people who experience it, look for as many of the following properties as possible. The more boxes a problem checks on this list, the more likely it is a strongly felt pain that prospective customers would pay to have solved:

Because the people in your audience experience critical problems so clearly and can measure the pains and costs attached, they will be very capable of calculating the value of any solution that solves their problems. People gladly pay as soon as paying for the solution is cheaper than continuing with how they attempted to solve their problems before.

As a general rule, people will pay for a solution:

If your solution does all three, you've hit the jackpot.

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See you next week!

Warm Regards from Berlin,

Arvid