Subscribe to Unchained Entrepreneur – Business Advice

What’s Your Problem?

Posted by Seth Elliott On April - 29 - 2010

VC Handing Out CashOne of the best ways to develop your company’s strategic plan, summary and especially elevator pitch is by asking yourself (and your team) a series of core questions. A great approach is to pose these questions and engage in an intensive brainstorming session for each to determine answers. In each case, you want to develop an answer each question that is concise, credible, clear and compelling. The first two key questions relate to the problem that you address.

What Problem Do you Solve?

The problem solution format has been around since at least the time of ancient Greece. By first addressing yourself to the problem you attack, you can set the stage for the rest of your pitch.

If you have a product or service offering that you provide (or plan to provide), don’t automatically assume you know the problem you address. Take a step back and get creative in your thought processes.

If you are not a technology oriented firm, this approach may seem simplistic at first. If you’re a dry-cleaner, for example, undoubtedly your immediate answer is “the problem is people have dirty garments.” Of course, that’s true, but you should dig deeper. Here are some quick examples of “problems” that you might identify as a drycleaner:

People have dirty garments – and it takes too long to clean them. This suggests that you might be offering dry cleaning services that have a quicker turn-around time than market standard.

People have dirty garments – and it is inconvenient to take time to get them clean. This implies that you might be providing a more conveniently located dry-cleaning establishment, or perhaps a delivery and pickup service.

People have dirty garments – and chemical cleaners harm the environment. In this case, you may be offering a dry cleaning service that uses natural, non-harmful substances as cleansers.

People have dirty garments – and it’s too expensive to have them professionally cleaned. Perhaps you have developed a business model that allows you to deliver dry-cleaning services at rates below competitors.

People have dirty garments – and professional cleaners don’t work very well. In this example, you may be offering a guarantee of some sort, or maybe you focus on insuring the integrity of buttons and other accoutrements as part of your service.

Defining the problem you address is the most critical component of your elevator pitch (and your entire business model). By describing the concrete issue that exists, you immediately frame the discussion in the mind of a potential investor, allowing you to move your pitch forward quickly into the next phase.

Once you’ve brainstormed and determined what market problem you attack, you need to spend the time refining the description. Work on polishing the problem description so that each word you use counts and results in a succinct yet clear and powerful narrative of the market issue.

Who Has the Problem?

Once you’ve fully articulated the market problem that you address, it’s time to examine who has the problem. For all intents and purposes, the answer to “Who has the problem?” is a proxy for the market that you address. The people that have the market problem in common are, of course, your potential customers.

Even if you think you know who has the problem (henceforth we will simply call them potential customers), now is the time for some research. Defining who your potential customers are is critical when building out your business strategy. At the very least you should be examining the following characteristics of your potential customers:

Gender. Does gender play a role in who has the problem? If customers are both male and female, be sure to examine the breakdown between the two. Don’t neglect the possibility that the “problem” occurs for one gender, but the other is also a customer. Men’s cologne, for example, is designed to solve a problem for male consumers. Nonetheless, a substantial amount of cologne purchases are made by women.

Age. Naturally, the age of your potential customer is valuable information. When trying to develop a picture of your average customer, focus on a specific age (or age range).

Ethnicity. The race or ethnicity of your potential customers can play a role in buying patterns and other decisions.

Geography. Are your potential customers geographically dispersed? Are they clustered in particular areas? The geographical distribution of your potential customers can prove significant when designing your marketing strategies.

When. Is the problem that you’ve identified constant throughout the year? Is there an element of seasonality in the need of your potential customer base? Articulating this component is an extension of describing the problem – but it specifically addresses prospective needs and buying patterns.

How Many. Finally, you should provide some analysis about the characteristics of who the problem effects. In particular, after defining the key elements of potential customers, be certain to set forth the total number of such prospects.

As you can see, there is a great deal of detail that you can gather in regards to the market problem and the prospects that need a solution. You absolutely must take the time and do the necessary research to develop a full understanding and comprehensive picture of your prospective customers.

By the way, please don’t make the mistake of saying that “everyone” has the problem that you’ve articulated. I’d recommend that you avoid any similar grandiose statements. Recently, I consulted with a client on creating his elevator pitch. The company has developed a specific social media application that integrates with Facebook. In initial consultations, I was informed that “every Facebook user has this problem.”

As of this writing, there are more than 400 million Facebook users. While it is possible that each and every one of them has the particular problem in question (though even that is a big stretch), isn’t it likely that the problem is far more applicable to some than others? My client needed to do some serious research in order to approach a financing source with credible definitions of who has the problem in order to improve the changes of a successful transaction.

By spending the time research, brainstorming and articulating the answers to these two questions, you’ll be far ahead of the game. These answers will serve as a foundation for the rest of your strategic planning – and may even provoke a closer examination of your own business model and some new ideas on how best to achieve your goals.

Be Sociable, Share!

Post to Twitter

About the Author

I have spent the last 15 years advising entrepreneurs on starting and growing their businesses, as well as assisting in financing those growth efforts. I have also been an entrepreneur on several occasions myself. By writing this blog, I hope to provide actionable advice on how to achieve your goals and become more successful.