Entrepreneurs, It’s Not About Your Idea. Find A Big Problem By Learning How To Spot What Customers Are Tolerating

Pitching ideas is easy. Finding big problems in large marketplaces would seem to be easier but in fact its harder. The reason it’s harder is interesting as usually big problems are hiding in plain sight. A great example would be Uber. For years consumers tolerated the lack of unified services and payments from the taxi industry. The lack of consistency, understanding fares, payment restrictions and even the poor delivery of service just led to a large marketplace of underserved customers. And yet, it was tolerated.

Until the founders of Uber said, why?” The beauty of finding and solving a problem in a large industry or marketplace is that if successful, it will result in a large company being formed. Why? Because the customers are already there. No need for marketing to explain how taxi’s work, just give people an alternative. And customer problems don’t change; it’s only technology and customer behavior that does. With all the technology today, one of the results is massive amounts of data. But data does not always yield insights.

Don’t be fooled by large amounts of data. Problems are often complex, with many contributing factors. Although it can be reassuring to think that an abundance of data will help you find problems and potential solutions, data is only helpful if you take the time to make sense of it. To find a lasting solution, it’s important to allocate as much or more time analyzing the data as collecting it; many entrepreneurs fail to take that into account.

You need to dive below the surface to understand the system that underlies the problem. Symptoms of problems are just the tip of the iceberg; easy to see and explore. They are the “above the surface” manifestation of the real problem. In order to understand the real problem, you need to dive below the surface and differentiate symptoms from problems, understand who is affected and why, what is being tolerated, who is being underserved and what are the potential solutions.

Here are some insights and tools to hopefully finding a big problem worth solving.

Differentiate fact from opinion. The saying goes, ‘everyone has an opinion.’ Your goal as an entrepreneur is to be non-emotional and clinical in assessing a potential problem. Focus only on the facts and then validate those. Assume nothing.

Specify underlying causes. When you hunt for problems, there is always a cause for the problem to exist. Find and validate real causes to problems. Be very specific as to the actual cause down to the smallest detail.

Consult each faction involved for information. When analyzing a ‘system’ or marketplace, note who all the players are from current companies to network partners to consumers. Analyze and research each ‘player’ in the network to really understand and gain insights.

State the problem specifically. As simple as this sounds, quite often people begin to try and create a solution without actually agreeing on the real problem. Is sunburn a problem? No, it’s a consequence of the real problem (i.e. too much UV exposure, skin type, too little sunscreen, etc.) So, finbd and agree on the real problem.

Avoid trying to solve the problem without data. As much as too much data could lead you astray, validating a problem without corresponding data is very risky as you are using data here to eliminate what is not a problem and what is the core problem. The key: good data usually directly from customers.

Pay attention to timing and trends. Uber does not happen if mobile phones and payments are not widely accepted in the marketplace. So, it’s important to track trends in major industries, examine or listen to customer comments and concerns and determine if the timing and trends are aligning to affect customers who are either underserved or simply tolerating something in a large marketplace.

Here are some tools and techniques to gain insights from customers.

Observation lab. Simply observe customers in the relevant marketplace and look for what’s hiding in plain sight. Don’t look for anything in particular, just observe them.

Talk to customers. As crazy as it sounds, quite a few entrepreneurs never actually talk to customers to gain insights. They assume they know the problem. Big mistake.

Talk to experts. A group of experts have something you don’t have. The collective wisdom and knowledge from years of observation and learning. Go talk to them.

Monitor customer conversations. If you want to know what people think, go hang out where they have conversations, online or offline.

Study customer behavior (ethnography). If you want to invent a better mop, do what Proctor and Gamble did to create Swifter. Hang out in the customer environment and observe what they do and don’t do to solve the problem of a small spill.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *