Young couple complains to a bank manager about excessive service charges.
If you are considering starting a business, you need to understand the entrepreneurial landscape in terms of how to increase the chances of your startup success when so many startups fail. According to a report by Boot genome, 90% of startups fail. Why? One of the biggest reasons is that just having an idea doesn’t guarantee success and many startups are proof of that. When you have an unproven idea, it’s hard to know where to start and whether your idea has any merit. Actually, it’s not about ideas at all. It’s really about finding problems that are worth solving and that already have a large market (people), for example in a large industry where new trends actually emphasize or magnify the problem.
So, in addition to researching and learning about people, industry and trends, you are looking for issues that people tolerate or are underserved because there are no alternatives. For example, if people get their morning energy from coffee and want something later in the day but not coffee, what do they drink? They might have opted for soda as a solution, but they didn’t really have much of a choice. They tolerated soft drinks until a better alternative came along.
So here comes the energy drink category to solve that problem. Same with unreliable taxi service by city. Customers tolerated that service for years until they got a better perceived solution with Uber. Uber did not create the “taxi” industry or create a new service. The founders simply noticed that customers were frustrated (inconsistent service and payment options) and offered a simple technology-based solution. So your goal is not to come up with ideas, but to find problems in large industries with many customers.
If you want to get good at finding problems, do the little things right the first time. Before you waste someone’s time and post the news of your new startup on social media, take a few steps of research to determine if the problem is worth solving.
Google it. Jump on Google and search for statistics or research on your problem. Are there any industry reports, thought leader blog posts, or media articles that talk about the issue?
Talk to customers. Determine exactly who is experiencing this problem the most and find some of these people to talk to. Ask them about their experiences with this problem, how often do they have it, is it a minor or major problem for them, how are they currently solving it?
Customer observation. If the problem can be spotted visually, find some potential customers to observe. Ask them to go through their usual moves or routine where they experience the problem, and write down anything interesting you see them doing or saying.
Anyone else trying to fix the problem? If you’re confident you’ve evaluated and confirmed the problem and it’s worth fixing, find out if anyone is already fixing it. These will not only be direct competitors, but everything that customers use to solve this problem. This will help you spot the gaps in the market.
If you really don’t have a specific starting point in your search for a great problem, here are some thought starters that can lead you to a great problem.
Tolerated or undeserved. In any industry there will always be problems. Choose an industry you like or are curious about and ask yourself what current customers tolerate or where they are underserved?
Watch trends. Again, by industry, are you paying attention to current or predicted trends? Read More
Run an observation lab. You can learn a lot just by observing customers in a service or product environment. What are they doing? What do company personnel do? Do you notice frustrations? Notice temporary solutions?
Talk to customers. This one is so simple, very few people will do it. If you wandered around pet stores in 2010, you would have seen people searching and inquiring about organic dog food for their “relatives” dogs. It was the beginning of the shift into natural and organic dog food in today’s $40 billion marketplace.
Talk to users’ experts/influencers. If you don’t have any issues you’re currently focusing on, talk to industry experts or even fellow entrepreneurs to find out what they’re observing. The beauty of this is that if you talk to ten experts, only you have all the ‘dots’ of information and can perhaps triangulate it into a problem.
Monitor customer conversations. Let’s say you love the travel industry. It’s big with over $1 trillion in global revenue. Many customers. So listen to some Reddit or social media posts related to travel and read what customers tolerate or complain about. Lost luggage, not being able to find cheap flights, not being able to find good local guides, etc.
