• Tamara

How to define a Startup Problem

Aspiring entrepreneurs are looking for that one incredible idea, that one incredible technology or product they would like to build. They believe the idea will allow them to start a business. Seems logical, right? You get an idea and build a business. However, this approach doesn't take the customer into account. It's an idea without a need (yet). An idea without a need is nice but it won't make a business. For this reason, every startup starts with a problem/pain point/need while every investor asks what problem the startup is solving.

How to define a startup problem

What is The Startup Problem

The problem is just it: a concise statement of the problem the startup is trying to solve. The sentence makes clear:

  1. What is the problem?

  2. Who has the problem?

  3. Why is this a problem?

Why is The Startup Problem important

It's important to start with the problem for several reasons:

  1. The goal of every business is to make money. To make money it has to sell something to customers. Customers will only buy it if it alleviates their pain and brings them benefits. Investors know the above, that's why to get money from them founders need to clearly understand what problem they are solving.

  2. A problem is the best starting point to figure out the rest of the business. Once you know the problem, you know who your customer is and can define how to best reach that customer and how to sell the product to him.

  3. Additionally, starting from the problem and the target customers you can calculate your potential market size. Something investors are really interested in when they look at a startup.

  4. Finally, starting with the problem can save time and money. Imagine, you start with an idea, you invest time and money to build a product only to find out later on that it doesn't solve a problem important enough for customers to pay for it. Starting with the problem as a hypothesis and validating it through small scale "experiments" could have saved a lot of time and money.


How to define The Startup Problem

This is the very beginning of making your idea a reality. Therefore, just putting together your logical thoughts about the customer problems is a good first step. Use the Fr