The Preeminence of the Customers’ Problem

Immerse yourself in your customer’s problem. The urgent and important problem IS the opportunity. Don’t build a solution looking for a problem.

Identifying a significant problem to solve is the powerful progenitor to a successful startup. For a startup, so many good things flow from identifying an unmet need that causes real pain for potential customers. When you find such a problem, you also find motivated future customers willing to take a risk on change and pay for help solving their problem. That is why I use the word preeminence when referring to the customer-perceived problem you decide to solve innovatively.

Problems, Solutions, and Benefits

The customer cares most about solving their problem (unmet need). They don’t really care about how it is solved, only the benefits of different hows. A simple transportation example: My problem is that I want to be able to drive from point A to point B. I have two different technologies to power cars to choose from. Do I care about the details of the various engineering approaches between internal combustion engine-powered cars versus electric vehicles? Unless I am an automotive engineer, probably not. More likely, I am interested in the benefits of these two different technologies, such as fuel costs, vehicle range, comfort and amenities, impact on the climate, etc. I don’t actually want to know how the car translates its fuel into motion to get me to my destination. I do not care about the technology itself, only if I have transportation that solves my problem of getting me to point B.

Avoid the Classic Mistake of a Solution Looking for a Problem

A classic temptation in creating a startup is getting excited about a particular technology (solution) and then hunting for a problem to solve. This approach is problematic because it often results in startup teams trying to force a poorly-fitting solution onto various possible customer problems rather than immersing themselves in the customer’s point of view and figuring out what solution would delight the customer. You can detect when you have a solution looking for a problem when what you are talking about has a focus on the how (solution) rather than the what (problem) and the why (impact). Even though focusing on the solution/technology is a classic mistake, entrepreneurs make it all the time. Here are a couple of examples:

• Artificial intelligence/machine learning: AI/ML are hot buzzwords right now. However, they are technologies looking for a problem. From the customers’ perspective, if they have a problem, and it is solved well with the most benefits relative to the alternatives, they likely do not care what descriptions we might put upon the underlying technology used to enable that solution. When I see startups advertising that they are an AI startup, I know they are talking to potential investors or potential acquirers more than they are talking to potential customers. Those who are talking to potential customers are talking in terms of the customers’ perceived problems. Customers will rarely describe their problem as an “AI problem.”  Instead, they will say they want a tool to help them identify cancer in the medical image, catch a patient whose deterioration has gone undetected, or predict sales or resource utilization. Note that none of these customer problems presupposes AI/ML as a solution. However, a good product may utilize these technologies to generate more accurate results and, thus, a better customer experience.
  
  
• Drones: A college team of aerospace engineers wanted to build something that flew, so they decided to design a drone as a senior project. Subsequently, complicated by the fact that, at the time, it was illegal to fly drones commercially, they spent a no-real-traction year trying to identify a business opportunity that they could solve with their cool technology. Ultimately, as a last-ditch effort, they decided to apply for a clean energy business plan competition. To qualify, they had to come up with a qualifying problem to solve. An inspired advisor suggested a specific business application to inspect cleantech infrastructure just to qualify to compete. The team grabbed some pictures off the internet, built a story around the idea, won the competition, and discovered that they had, by happenstance, landed on a real unmet need. Once they focused on the unmet need, they built a highly successful startup with an ever-expanding array of products and services that went way beyond just the initial enabling drone technology. While this story turned out well, the key to remember is that the initial technology solution wasn’t enough to support a startup until they identified a vital suite of unmet needs by developing a deep understanding of their customer and customer’s problems.

The solution looking for a problem is such an easy mistake to make because creative technical problem-solvers often think about how they might apply their skills in the context of a startup. Yet, they approach the startup creation process wanting to leverage their expertise in particular technologies (solution sets), which predisposes them to hunt for problems to solve with their specific technological skills.

Focusing on the Customer’s Problem in Various Aspects of Startup Development

The opposite of a technology or solution looking for a problem is to focus first and foremost on the customer’s problem. Investors are clear on this. They want to hear pitches that focus first on what problem the team is solving, the scale of that problem, and how good the competitive advantage (benefits) of the envisioned solution are at solving the problem. They don’t want to focus first on the tech. In fact, they usually assume that the tech works as advertised for the first layer of due diligence.

To help keep your focus on the customer’s problem, try thinking of the technical innovations underlying your solution as a black box. See if you can describe the problem and solution without explaining the details of what is happening in the black box. When you can do this, you know that you are keeping your focus where it belongs: on the customer and what matters to the customer. You can apply this approach to many aspects of your startup, including the following examples:

• In startup formation, focus first on identifying a worthwhile customer problem to solve. Immerse yourself in the customers’ world and validate the strength and dimensions of the need. Get into the details and consequences of the customers’ problem. This is why customer discovery is such an essential part of figuring out the right problem to solve because the foundation of a successful startup is identifying a problem that is sufficiently important to justify the creation of a startup to solve it.

• In fundraising, remember that the first priority of investors is to understand the scale and strength of the market need. Talk about the what and why of your concept, and minimize and abstract the how. This keeps your “secret sauce” safe in the inherently non-confidential pitch deck (it does not matter if you put confidential on your slides – and no venture capitalist is going to sign an NDA) and keeps the focus of your story on the right and most important topics for fundraising.
  
  
• In product development, ensure that you actively seek out the voice of the customer throughout the process of developing your solution. Make sure you define your requirements from a deep understanding of the customer’s needs rather than starting with the technology limitations. Get feedback along the way from customers to ensure your design decisions resonate with customers. Test and validate the performance of your product with actual customers using it in a typical setting to ensure you have not overlooked anything. Of course, you will need to work through all the details of your actual technical approach – everything inside that black box — but what matters is how those technical decisions enable performance from a customer’s perspective.
  
  
• In marketing, draw attention to the customers’ problem you are solving to attract those prospects experiencing that unmet need – and then sell the benefits of solving it your way. Only describe the how of your solution to the degree required to answer your prospects’ questions about the applicability of your solution to the particulars of their situation. Remember, most customers are only interested in solving their problems, not in the technical details in your solution’s black box.

I titled this blog the preeminence of the customer’s problem because it is the strength of a customer’s unmet need that drives the willingness of the customer to seek and pay for solutions to that need. By focusing on the need, startup teams have the opportunity to design a solution that delights the customer. The technical how underlying the breakthrough solution must be figured out, but the results/benefits of the solution will convince a customer to pay for it. Keep your eye on the prize when you are seeking to design successful innovations.